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TABLE OF CONTENTS

Table of Contents

As filed with the Securities and Exchange Commission on April 17, 2015

Registration No. 333-202921


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 2
to

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



AbbVie Inc.
(Exact name of registrant as specified in its charter)



Delaware
(State or other jurisdiction of
incorporation or organization)
  2834
(Primary Standard Industrial
Classification Code Number)
  32-0375147
(I.R.S. Employer
Identification Number)

1 North Waukegan Road
North Chicago, Illinois 60064
(847) 932-7900

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)



Laura J. Schumacher, Esq.
Executive Vice President, Business Development, External Affairs and General Counsel
AbbVie Inc.
1 North Waukegan Road
North Chicago, Illinois 60064
(847) 932-7900

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)



Copies to:

Lara M. Levitan
AbbVie Inc.
1 North Waukegan Road
North Chicago,
Illinois 60064-6400
(847) 932-7900

 

David C. Karp, Esq.
David K. Lam, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-2000

 

Elaine Stracker PhD, JD
General Counsel
Pharmacyclics, Inc.
995 E. Arques Avenue
Sunnyvale, California 94085
(408) 774-0330

 

Robert T. Ishii, Esq.
Denny Kwon, Esq.
Wilson Sonsini Goodrich & Rosati
One Market Plaza
Spear Tower, Suite 3300
San Francisco, California 94105
415-947-2000



Approximate date of commencement of proposed sale of the securities to the public:
March 23, 2015, the date on which the preliminary prospectus and tender offer materials were filed and sent to securityholders

            If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:    o

            If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

            If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

            Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o
(Do not check if a
smaller reporting company)
  Smaller reporting company o

            If applicable, place an ý in the box to designate the appropriate rule provision relied upon in conducting this transaction:

            Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)    o

            Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)    o



CALCULATION OF REGISTRATION FEE

               
 
Title of each class of securities
to be registered

  Amount to be
registered

  Proposed maximum
offering price per
share

  Proposed maximum
aggregate offering
price

  Amount of
registration fee

 

Common stock, par value $0.01 per share

  150,150,179 shares(1)   N/A   $8,496,518,130(2)   $987,295.41(3)(4)(5)

 

(1)
Represents the maximum number of shares of AbbVie Inc. common stock estimated to be issuable upon consummation of the offer and subsequent merger.

(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 under the Securities Act on the basis of the market value of the shares of Pharmacyclics common stock to be cancelled in the offer and the merger, computed in accordance with Rule 457(f)(1) and Rule 457(f)(3) based on (a) the product of (i) $257.93, the average of the high and low sales prices per share of Pharmacyclics common stock on March 19, 2015, as reported by the New York Stock Exchange, and (ii) 80,398,544 (the number of shares of Pharmacyclics common stock estimated to be outstanding at the time the offer and the merger are consummated), less (b) $12,240,678,324 (the estimated amount of cash that will be paid by AbbVie Inc. to the holders of shares of Pharmacyclics common stock in the merger.

(3)
The amount of the filing fee, calculated in accordance with Rule 457(c) and Rule 457(f) under the Securities Act, equals 0.00011620 multiplied by the proposed maximum offering price.

(4)
The filing fee previously paid by AbbVie Inc. on behalf of AbbVie Private Limited, a wholly owned subsidiary of AbbVie, upon filing a Registration Statement on Form S-4 on August 21, 2014 (later terminated by withdrawal letter on October 22, 2014) has been offset against the currently due filing fee of $987,295.41.

(5)
Previously paid



            The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


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The information in this document may change. The registrant may not complete the offer and issue these securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This document is not an offer to sell these securities, and AbbVie Inc. is not soliciting an offer to buy these securities in any state or jurisdiction in which such offer is not permitted.

PRELIMINARY AND SUBJECT TO CHANGE, DATED APRIL 17, 2015

Offer by

ABBVIE INC.

to Exchange Each Outstanding Share of Common Stock of

PHARMACYCLICS, INC.

for

$152.25 in Cash and
$109.00 in Fair Market Value of Shares of Common Stock of AbbVie Inc.

or

$261.25 in Cash

or

$261.25 in Fair Market Value of Shares of Common Stock of AbbVie Inc.

(subject in each case to the election procedures and, in the case of an all-cash election or an all-stock election,
to the proration procedures described in this document and related letter of election and transmittal)

        THE OFFER AND THE WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MAY 1, 2015, UNLESS EXTENDED.

        AbbVie Inc., through its direct wholly owned subsidiary Oxford Amherst Corporation (the "Offeror"), is offering to exchange for each outstanding share of common stock of Pharmacyclics, Inc., par value $0.0001 per share, validly tendered and not properly withdrawn in the offer:

        We refer to the above as the "mixed consideration." In lieu of receiving the mixed consideration, holders of Pharmacyclics shares may elect to receive, for each Pharmacyclics share that they hold, (1) $261.25 in cash (we refer to this election as the "all-cash election") or (2) a number of shares of AbbVie common stock equal to $261.25 divided by the volume weighted average sale price per share of AbbVie common stock as reported on the NYSE for the ten consecutive trading days ending on and including the second trading day prior to the final expiration date of the offer, as calculated by Bloomberg Financial LP under the function "ABBV UN Equity AQR" (we refer to this election as the "all-stock election").

        Pharmacyclics stockholders who validly tender and do not properly withdraw their Pharmacyclics shares into the offer and do not make a valid election will receive the mixed consideration for their Pharmacyclics shares. Pharmacyclics stockholders who make the all-cash election or the all-stock election will be subject to proration to ensure that approximately 41.7% of the aggregate consideration in the offer will be paid in shares of AbbVie common stock and approximately 58.3% of the aggregate consideration in the offer (as reduced by the Pharmacyclics shares held by stockholders who have properly exercised and perfected dissenters' rights under the General Corporation Law of the State of


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Delaware (the "DGCL")) will be paid in cash. See "The Offer—Elections and Proration" for a description of the proration procedure.

        The number of shares of AbbVie common stock to be received by holders of Pharmacyclics shares in exchange for each Pharmacyclics share that will receive either the mixed consideration or the all-stock consideration will be determined in advance of the expiration date of the offer based on the final expiration date of the offer. AbbVie will announce the number of shares of AbbVie common stock to be exchanged for each Pharmacyclics share that will receive either the mixed consideration or the all-stock consideration by issuing a press release no later than 9:00 a.m., New York City time, on the trading day prior to the final expiration date. For example, AbbVie will announce, by issuing a press release no later than 9:00 a.m., New York City time, on April 30, 2015, the number of shares of AbbVie common stock to be received by holders of Pharmacyclics shares in exchange for each Pharmacyclics share that will receive either the mixed consideration or the all-stock consideration that will apply if the offer expires at 5:00 p.m., New York City time, on May 1, 2015. If the offer is extended, AbbVie will recalculate this information based on the later expected final expiration date and announce the new numbers in a similar manner.

        The purpose of the offer is for AbbVie to acquire control of, and ultimately the entire equity interest in, Pharmacyclics. The offer is the first step in AbbVie's plan to acquire all of the outstanding Pharmacyclics shares. If the offer is completed, AbbVie intends to consummate promptly following (and on the same date as) the consummation of the offer a merger of the Offeror with and into Pharmacyclics, with Pharmacyclics surviving the merger (which we refer to as the "first merger"). The purpose of the first merger is for AbbVie to acquire all Pharmacyclics shares that it did not acquire in the offer. In the first merger, each outstanding Pharmacyclics share that was not acquired by AbbVie or the Offeror will be converted into the mixed consideration or, at the election of the holder of such shares, the all-cash consideration or all-stock consideration, subject to proration to ensure that approximately 41.7% of the aggregate consideration in the first merger will be paid in shares of AbbVie common stock and approximately 58.3% of the aggregate consideration in the first merger will be paid in cash. After the first merger, the Pharmacyclics business will be held in a wholly owned subsidiary of AbbVie, and the former Pharmacyclics stockholders will no longer have any direct ownership interest in the surviving corporation. Immediately following the first merger, the surviving corporation will merge with and into Merger Sub 2 (which we refer to as the "second merger" and together with the first merger, the "merger"), with Merger Sub 2 surviving the second merger under the name "Pharmacyclics."

        The Offeror's obligation to accept for exchange, and to exchange, Pharmacyclics shares for cash and shares of AbbVie common stock in the offer is subject to a number of conditions, including that a majority of the outstanding Pharmacyclics shares have been validly tendered (and not properly withdrawn) in the offer. See "The Offer—Conditions of the Offer" for a description of all of such conditions.

        AbbVie common stock is listed on the NYSE under the symbol "ABBV," and Pharmacyclics common stock is listed on the NASDAQ Capital Market (the "NASDAQ") under the symbol "PCYC."

        The merger will entitle Pharmacyclics stockholders to appraisal rights under the DGCL. To exercise appraisal rights, a Pharmacyclics stockholder must strictly comply with all of the procedures under the DGCL. These procedures are described more fully in the section entitled "The Offer—Purpose of the Offer and the Merger—Dissenters' Rights."

        For a discussion of certain factors that Pharmacyclics stockholders should consider in connection with the offer, please read "Risk Factors" beginning on page 13.

        AbbVie has not authorized any person to provide any information or to make any representation in connection with the offer other than the information contained or incorporated by reference in this document, and if any person provides any information or makes any representation of this kind, that information or representation must not be relied upon as having been authorized by AbbVie.

        Neither the U.S. Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offense.

        The date of this preliminary prospectus/offer to exchange is April 17, 2015.


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TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER

    v  

SUMMARY

   
1
 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF ABBVIE

   
8
 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF PHARMACYCLICS

   
10
 

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

   
11
 

COMPARATIVE PER SHARE DATA (UNAUDITED)

   
12
 

RISK FACTORS

   
13
 

Risk Factors Relating to the Offer

    13  

Risk Factors Relating to AbbVie and the Combined Company

    15  

Risks Related to AbbVie's Business

    17  

Risks Related to Pharmacyclics' Business

    17  

FORWARD-LOOKING STATEMENTS

   
18
 

THE COMPANIES

   
19
 

AbbVie

    19  

Offeror

    19  

Merger Sub 2

    19  

Pharmacyclics

    19  

THE OFFER

   
21
 

General

    21  

Background of the Offer and the Merger

    22  

Pharmacyclics' Reasons for the Offer and the Merger

    30  

AbbVie's Reasons for the Offer and the Merger

    34  

Opinion of Pharmacyclics' Financial Advisors

    36  

Elections and Proration

    52  

Consequences of Tendering with No Election

    54  

Distribution of Offering Materials

    54  

Expiration of the Offer

    54  

Extension, Termination and Amendment

    54  

Exchange of Shares; Delivery of Cash and Shares of AbbVie Common Stock

    55  

Withdrawal Rights

    56  

Procedure for Tendering

    57  

No Guaranteed Delivery

    58  

Grant of Proxy

    58  

Fees and Commissions

    59  

Matters Concerning Validity and Eligibility

    59  

Announcement of Results of the Offer

    59  

Ownership of AbbVie After the Offer and the Merger

    59  

Purpose of the Offer and the Merger; Dissenters' Rights

    60  

Plans for Pharmacyclics

    61  

Effect of the Offer on the Market for the Pharmacyclics Shares; NASDAQ Listing; Registration Under the Exchange Act; Margin Regulations

    62  

Conditions of the Offer

    63  

Certain Legal Matters; Regulatory Approvals

    65  

Interests of Certain Persons in the Offer and the Merger

    67  

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Certain Relationships With Pharmacyclics

    73  

Source and Amount of Funds

    73  

Support Agreement

    74  

Fees and Expenses

    74  

Accounting Treatment

    74  

Stock Exchange Listing

    75  

Resale of AbbVie Common Stock

    75  

MERGER AGREEMENT

   
76
 

The Offer

    76  

The Merger

    77  

Completion and Effectiveness of the Merger

    77  

Merger Consideration

    77  

Exchange of Pharmacyclics Stock Certificates for the Merger Consideration

    80  

Fractional Shares

    80  

Conditions to the Merger

    80  

Representations and Warranties

    80  

No Solicitation of Other Offers by Pharmacyclics

    82  

Change of Recommendation

    84  

Conduct of Business Before Completion of the Merger

    85  

Pharmacyclics and IMBRUVICA® (ibrutinib) Names

    89  

Access

    89  

Additional Agreements

    89  

Treatment of Pharmacyclics Equity Awards; Employee Stock Purchase Plan

    90  

Employee Matters

    90  

Directors' and Officers' Indemnification

    91  

Termination of the Merger Agreement

    92  

Termination Fee and Expenses

    94  

Effect of Termination

    94  

Amendments, Enforcements and Remedies, Extensions and Waivers

    95  

COMPARATIVE MARKET PRICE AND DIVIDEND MATTERS

   
96
 

Market Price History

    96  

Dividends

    96  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

   
97
 

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

   
108
 

DESCRIPTION OF ABBVIE CAPITAL STOCK

   
111
 

General

    111  

Common Stock

    111  

Preferred Stock

    111  

Anti-Takeover Effects of Various Provisions of Delaware Law and AbbVie's Amended and Restated Certificate of Incorporation and By-laws

    111  

Limitations on Liability, Indemnification of Officers and Directors, and Insurance

    113  

Exclusive Forum

    113  

Authorized but Unissued Shares

    114  

COMPARISON OF STOCKHOLDERS' RIGHTS

   
115
 

LEGAL MATTERS

   
123
 

EXPERTS

   
123
 

WHERE TO OBTAIN MORE INFORMATION

   
124
 

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Annex A

 

Composite Agreement and Plan of Reorganization

  A-1

Annex B

 

Opinion of Centerview Partners LLC

 
B-1

Annex C

 

Opinion of J.P. Morgan Securities LLC

 
C-1

Annex D

 

Directors and Executive Officers of AbbVie and the Offeror

 
D-1

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        This document incorporates by reference important business and financial information about AbbVie, Pharmacyclics and their respective subsidiaries from documents filed with the SEC that have not been included in or delivered with this document. This information is available without charge at the SEC's website at www.sec.gov, as well as from other sources. See "Where To Obtain More Information."

        You can obtain the documents incorporated by reference in this document by requesting them in writing or by telephone at the following address and telephone number.

AbbVie Inc.
1 North Waukegan Road
North Chicago, Illinois 60064
Attention: Investor Relations
(847) 932-7900
http://www.abbvieinvestor.com/

        In addition, if you have questions about the offer or the merger, or if you need to obtain copies of this document, the letter of election and transmittal or other documents incorporated by reference in this document, you may contact the company listed below. You will not be charged for any of the documents you request.

Georgeson Inc.
480 Washington Blvd., 26th Floor
Jersey City, New Jersey 07310
(888) 680-1528

        If you would like to request documents, please do so by April 24, 2015, in order to receive them before the expiration of the offer.

        Information included in this document relating to Pharmacyclics, including but not limited to the descriptions of Pharmacyclics and its business and the information under the headings "Selected Historical Consolidated Financial Data of Pharmacyclics," "The Offer—Background of the Offer and Merger," "The Offer—Pharmacyclics' Reasons for the Offer and the Merger," "The Offer—Opinion of Pharmacyclics' Financial Advisors" and "The Offer—Interests of Certain Persons in the Offer and the Merger" appears in the Solicitation/Recommendation Statement on Schedule 14D-9 dated March 23, 2015, and amended as of the date of this document and filed by Pharmacyclics with the SEC (the "Schedule 14D-9"). The Schedule 14D-9 was mailed to holders of Pharmacyclics shares on or about March 23, 2015.

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QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER

Below are some of the questions that you as a holder of Pharmacyclics shares may have regarding the offer and the merger and answers to those questions. You are urged to carefully read the remainder of this document and the related letter of election and transmittal and the other documents to which we have referred because the information contained in this section and in the "Summary" is not complete. Additional important information is contained in the remainder of this document and the related letter of election and transmittal. See "Where To Obtain More Information." As used in this document, unless otherwise indicated or the context requires, "AbbVie" or "we" refers to AbbVie Inc. and its consolidated subsidiaries; the "Offeror" refers to Oxford Amherst Corporation, a wholly owned subsidiary of AbbVie; "Merger Sub 2" refers to Oxford Amherst LLC, a wholly owned subsidiary of AbbVie; and "Pharmacyclics" refers to Pharmacyclics, Inc. and its consolidated subsidiaries.

Who is offering to buy my Pharmacyclics shares?

AbbVie Inc., through its direct wholly owned subsidiary Oxford Amherst Corporation (the "Offeror"), is making this offer to exchange cash and AbbVie common stock for Pharmacyclics shares. AbbVie is a global, research-based biopharmaceutical company. AbbVie develops and markets advanced therapies that address some of the world's most complex and serious diseases. AbbVie products are used to treat chronic autoimmune diseases, including rheumatoid arthritis, psoriasis, and Crohn's disease; hepatitis C; human immunodeficiency virus; endometriosis; thyroid disease; Parkinson's disease; complications associated with chronic kidney disease (CKD) and cystic fibrosis; and other health conditions such as low testosterone. AbbVie also has a pipeline of promising new medicines, including more than 30 compounds or indications in Phase 2 or Phase 3 development across such important medical specialties as immunology, virology/liver disease, oncology, renal disease, neurological diseases and women's health. AbbVie has approximately 26,000 employees and its products are sold in over 170 countries.

On March 4, 2015, AbbVie, Offeror, Pharmacyclics and Oxford Amherst LLC, a direct wholly owned subsidiary of AbbVie, entered into an Agreement and Plan of Reorganization. On March 22, 2015, AbbVie, Offeror, Pharmacyclics and Oxford Amherst LLC entered into Amendment No. 1 to the Agreement and Plan of Reorganization. The Agreement and Plan of Reorganization and Amendment No. 1 to the Agreement and Plan of Reorganization are collectively referred to as the "merger agreement."

What are the classes and amounts of Pharmacyclics securities that AbbVie is offering to acquire?

AbbVie is seeking to acquire all issued and outstanding shares of Pharmacyclics common stock, par value $0.0001 per share.

What will I receive for my Pharmacyclics shares?

AbbVie, through the Offeror, is offering to exchange for each outstanding Pharmacyclics share validly tendered and not properly withdrawn in the offer:

We refer to the above as the "mixed consideration."

In lieu of receiving the mixed consideration, holders of Pharmacyclics shares may elect to receive, for each Pharmacyclics share that they hold, (1) $261.25 in cash (we refer to this election as the "all-cash election" and this amount as the "all-cash consideration") or (2) a

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number of shares of AbbVie common stock equal to $261.25 divided by the volume weighted average sale price per share of AbbVie common stock as reported on the NYSE for the ten consecutive trading days ending on and including the second trading day prior to the final expiration date of the offer, as calculated by Bloomberg Financial LP under the function "ABBV UN Equity AQR" (we refer to this election as the "all-stock election" and this amount as the "all-stock consideration").

Pharmacyclics stockholders who tender their Pharmacyclics shares into the offer and do not make a valid election will receive the mixed consideration for their Pharmacyclics shares. Pharmacyclics stockholders who make the all-cash election or the all-stock election will be subject to proration to ensure that approximately 41.7% of the aggregate consideration in the offer will be paid in AbbVie common stock and approximately 58.3% of the aggregate consideration in the offer (as reduced by the Pharmacyclics shares held by stockholders who have properly exercised and perfected dissenters' rights under the DGCL) will be paid in cash. See "The Offer—Elections and Proration" for a detailed description of the proration procedures applicable to the offer.

The number of shares of AbbVie common stock to be received by holders of Pharmacyclics shares in exchange for each Pharmacyclics share that will receive either the mixed consideration or the all-stock consideration will be determined in advance of the expiration date of the offer based on the final expiration date of the offer. AbbVie will announce the number of shares of AbbVie common stock to be exchanged for each Pharmacyclics share that will receive either the mixed consideration or the all-stock consideration by issuing a press release no later than 9:00 a.m., New York City time, on the trading day prior to the final expiration date. For example, AbbVie will announce, by issuing a press release no later than 9:00 a.m., New York City time, on April 30, 2015, the number of shares of AbbVie common stock to be received by holders of Pharmacyclics shares in exchange for each Pharmacyclics share that will receive either the mixed consideration or the all-stock consideration that will apply if the offer expires at 5:00 p.m., New York City time, on May 1, 2015. If the offer is extended, AbbVie will recalculate this information based on the later expected final expiration date and announce the new numbers in a similar manner.

Pharmacyclics stockholders should consider the potential effects of proration and should obtain current market quotations for Pharmacyclics shares and shares of AbbVie common stock before deciding whether to tender pursuant to the offer and before electing the form of consideration they wish to receive. Please see "Risk Factors—Risk Factors Relating to the Offer."

Will I have to pay any fee or commission to exchange my Pharmacyclics shares?

If you are the record owner of your Pharmacyclics shares and you tender these shares in the offer, you will not have to pay any brokerage fees, commissions or similar expenses. If you own your Pharmacyclics shares through a broker, dealer, commercial bank, trust company or other nominee and your broker, dealer, commercial bank, trust company or other nominee tenders your Pharmacyclics shares on your behalf, your broker or such other nominee may charge a fee for doing so. You should consult your broker, dealer, commercial bank, trust company or other nominee to determine whether any charges will apply.

Why is AbbVie making this offer?

The purpose of the offer is for AbbVie to acquire control of, and ultimately the entire equity interest in, Pharmacyclics. The offer is the first step in AbbVie's plan to acquire all of the outstanding Pharmacyclics shares. AbbVie intends to consummate the merger promptly after (and on the same date as) the consummation of the offer. The purpose of the merger is for AbbVie to acquire all Pharmacyclics shares that it did not acquire in the offer. After the merger, the Pharmacyclics business will be held in a wholly owned subsidiary of AbbVie, and the former Pharmacyclics stockholders will no longer have any direct ownership interest in this entity.

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What does the Pharmacyclics board of directors recommend?

The Pharmacyclics board of directors has unanimously resolved to recommend that the holders of Pharmacyclics shares accept the offer and tender their Pharmacyclics shares in the offer. The Pharmacyclics board of directors also unanimously determined that the terms of the merger agreement and the transactions contemplated thereby, including the offer and the merger, are fair to, and in the best interests of, Pharmacyclics and its stockholders.

A description of the reasons for this recommendation is set forth in Pharmacyclics' Solicitation/Recommendation Statement on Schedule 14D-9 that was mailed to you on or about March 23, 2015.

Simultaneously with the execution and delivery of the merger agreement, Robert W. Duggan, the chairman and chief executive officer of Pharmacyclics, entered into a support agreement with AbbVie and the Offeror (which we refer to as the "support agreement"), pursuant to which Mr. Duggan has agreed, among other things, (1) to tender his Pharmacyclics shares into the offer and (2) to cause certain Pharmacyclics stockholders affiliated with Mr. Duggan to tender their respective Pharmacyclics shares into the offer. Mr. Duggan and the affiliated Pharmacyclics stockholders subject to the support agreement collectively currently own approximately 17.3% of the outstanding Pharmacyclics shares. The support agreement terminates automatically upon the termination of the merger agreement.

What are the most significant conditions of the offer?

The offer is conditioned upon, among other things, the following:

The offer is subject to a number of additional conditions set forth below in the section entitled "The Offer—Conditions of the Offer." The conditions to the offer are for the sole benefit of AbbVie and the Offeror and may be asserted by AbbVie or the Offeror regardless of the

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circumstances giving rise to any such condition or may be waived by AbbVie or the Offeror, by express and specific action to that effect, in whole or in part at any time and from time to time, in each case. However, certain specified conditions (including all the conditions noted above other than the condition related to a material adverse effect of Pharmacyclics) may only be waived by AbbVie or the Offeror with the express written consent of Pharmacyclics. There is no financing condition to the offer.

How long will it take to complete the proposed transaction?

The transaction is expected to be completed in mid-2015, subject to the satisfaction or waiver of the conditions described in "The Offer—Conditions of the Offer" and "Merger Agreement—Conditions to the Merger."

How long do I have to decide whether to tender my Pharmacyclics shares in the offer?

The offer is scheduled to expire at 5:00 p.m., New York City time, on May 1, 2015, unless extended by AbbVie. Any extension, delay, termination, waiver or amendment of the offer will be followed as promptly as practicable by public announcement thereof to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. During any such extension, all Pharmacyclics shares previously tendered and not properly withdrawn will remain subject to the offer, subject to the rights of a tendering stockholder to withdraw such stockholder's shares. "Expiration date" means May 1, 2015, unless and until the Offeror has extended the period during which the offer is open, subject to the terms and conditions of the merger agreement, in which event the term "expiration date" means the latest time and date at which the offer, as so extended by the Offeror, will expire.

Subject to the provisions of the merger agreement and the applicable rules and regulations of the SEC, and unless Pharmacyclics consents otherwise or the merger agreement is otherwise terminated, the Offeror must (1) extend the offer in the event that any of the offer conditions (including the minimum tender condition) have not been satisfied or waived as of any then scheduled expiration of the offer, for periods of up to ten business days each in order to further seek to satisfy the conditions to the offer, and (2) extend the offer for the minimum period required by any rule, regulation, interpretation or position of the SEC or its staff or NASDAQ which is applicable to the offer or to the extent necessary to resolve any comments of the SEC or its staff applicable to the offer or the Schedule TO.

Any decision to extend the offer will be made public by an announcement regarding such extension as described under "The Offer—Extension, Termination and Amendment."

How do I tender my Pharmacyclics shares?

To tender your Pharmacyclics shares represented by physical certificates into the offer, you must deliver the certificates representing such shares, together with a completed letter of election and transmittal and any other documents required by the letter of election and transmittal, to Computershare, the exchange agent for the offer, not later than the expiration time of the offer. The letter of election and transmittal is enclosed with this document.

If your Pharmacyclics shares are held in "street name" (i.e., through a broker, dealer, commercial bank, trust company or other nominee), these shares can be tendered by your nominee by book-entry transfer through The Depository Trust Company.

We are not providing for guaranteed delivery procedures and therefore you must allow sufficient time for the necessary tender procedures to be completed during normal business hours of The Depository Trust Company prior to the expiration date. Tenders received by the exchange agent after the expiration date will be disregarded and of no effect. In all cases, you will receive your consideration for your tendered Pharmacyclics shares only after timely receipt by the exchange agent of certificates for such shares (or of a confirmation of a book-entry transfer of such shares) and a properly completed and duly

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executed letter of election and transmittal and any other required documents.

For a complete discussion on the procedures for tendering your Pharmacyclics shares, see "The Offer—Procedure for Tendering."

Until what time can I withdraw tendered Pharmacyclics shares?

You may withdraw your previously tendered Pharmacyclics shares at any time until the offer has expired and, if the Offeror has not accepted your Pharmacyclics shares for payment by May 21, 2015, you may withdraw them at any time on or after that date until the Offeror accepts shares for payment. Once the Offeror accepts your tendered Pharmacyclics shares for payment upon expiration of the offer, however, you will no longer be able to withdraw them. For a complete discussion of the procedures for withdrawing your Pharmacyclics shares, see "The Offer—Withdrawal Rights."

How do I withdraw previously tendered Pharmacyclics shares?

To withdraw previously tendered Pharmacyclics shares, you must deliver a written notice of withdrawal with the required information to the exchange agent at any time at which you have the right to withdraw shares. If you tendered Pharmacyclics shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct such broker, dealer, commercial bank, trust company or other nominee to arrange for the withdrawal of your Pharmacyclics shares and such broker, dealer, commercial bank, trust company or other nominee must effectively withdraw such Pharmacyclics shares at any time at which you have the right to withdraw shares. For a discussion on the procedures for withdrawing your Pharmacyclics shares, including the applicable deadlines for effecting withdrawals, see "The Offer—Withdrawal Rights."

When and how will I receive the offer consideration in exchange for my tendered Pharmacyclics shares?

The Offeror will exchange all validly tendered and not properly withdrawn Pharmacyclics shares promptly after the expiration date of the offer, subject to the terms thereof and the satisfaction or waiver of the conditions to the offer, as set forth in "The Offer—Conditions of the Offer." The Offeror will deliver the consideration for your validly tendered and not properly withdrawn shares through the exchange agent, which will act as your agent for the purpose of receiving the offer consideration from the Offeror and transmitting such consideration to you. In all cases, you will receive your consideration for your tendered Pharmacyclics shares only after timely receipt by the exchange agent of certificates for such Pharmacyclics shares (or a confirmation of a book-entry transfer of such shares as described in "The Offer—Procedure for Tendering") and a properly completed and duly executed letter of election and transmittal and any other required documents for such shares.

Why does the cover page to this document state that this offer is preliminary and subject to change, and that the registration statement filed with the SEC is not yet effective? Does this mean that the offer has not commenced?

No. Completion of this document and effectiveness of the registration statement are not necessary to commence this offer. The offer was commenced on the date of the initial filing of the registration statement on Form S-4 of which this document is a part. AbbVie cannot, however, accept for exchange any Pharmacyclics shares tendered in the offer or exchange any shares until the registration statement is declared effective by the SEC and the other conditions to the offer have been satisfied or waived.

What happens if I do not tender my Pharmacyclics shares?

If, after consummation of the offer, AbbVie owns a majority of the outstanding Pharmacyclics shares, it intends to immediately complete the merger. Upon consummation of the merger, each Pharmacyclics share that has not been tendered and accepted for exchange in the offer, unless appraisal rights under Delaware law are properly exercised, will be converted in the merger into the right to receive, at the election of the holder, the all-cash consideration, the

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all-stock consideration or the mixed consideration, but the all-cash consideration and all-stock consideration will be subject to proration to ensure that approximately 41.7% of the aggregate consideration in the first merger will be paid in shares of AbbVie common stock and approximately 58.3% of the aggregate consideration in the first merger will be paid in cash. A letter of election and transmittal will be sent to you following the merger to make these elections. If you do not make an election, you will be treated as if you had made an election to receive the mixed consideration.

Does AbbVie have the financial resources to complete the offer and the merger?

The offer consideration will consist of AbbVie common stock and cash. The offer and the merger are not conditioned upon any financing arrangements or contingencies.

AbbVie has entered into a 364-Day Bridge Term Loan Credit Agreement (the "bridge loan agreement") with the various financial institutions named therein, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent for the lenders. The bridge loan agreement provides for an $18.0 billion term facility under which, subject to the satisfaction of certain conditions, AbbVie may request up to two borrowings: (i) one in an amount up to $18.0 billion on the first date on which the offer is consummated and the conditions to funding of the bridge loan agreement have been satisfied (the "bridge closing date") and (ii) one on any date within 60 days after the bridge closing date in an amount up to the lesser of $6.0 billion and the amount of the $18.0 billion commitment remaining after the initial borrowing. No other plans or arrangements have been made to finance or repay such financing after the consummation of the offer and the merger. No alternative financing arrangements or alternative financing plans have been made in the event such financings fail to materialize. See "The Offer—Source and Amount of Funds."

If the offer is completed, will Pharmacyclics continue as a public company?

No. AbbVie is required, on the terms and subject to the satisfaction or waiver of the conditions set forth in the merger agreement, to consummate the merger as soon as practicable following the purchase of Pharmacyclics shares in the offer. If the merger takes place, Pharmacyclics will no longer be publicly traded. Even if for some reason the merger does not take place, if AbbVie purchases all Pharmacyclics shares validly tendered and not properly withdrawn, there may be so few remaining stockholders and publicly held shares that Pharmacyclics shares will no longer be eligible to be traded through the NASDAQ or other securities exchanges, there may not be an active public trading market for Pharmacyclics shares, and Pharmacyclics may no longer be required to make filings with the SEC or otherwise comply with the SEC rules relating to publicly held companies.

Will the offer be followed by a merger if all Pharmacyclics shares are not tendered in the offer?

Yes, unless the conditions to the merger are not satisfied or waived. If the Offeror accepts for payment and pays for all Pharmacyclics shares validly tendered and not properly withdrawn pursuant to the offer, and the other conditions to the merger are satisfied or waived, the merger will take place promptly after (and on the same date as) the consummation of the offer. If the merger takes place, AbbVie will own 100% of the equity of Pharmacyclics, and all of the remaining Pharmacyclics stockholders, other than AbbVie and the Offeror, will have the right to receive the mixed consideration, the all-cash consideration or the all-stock consideration (the "merger consideration") with the form of such consideration to be subject to further election and proration as described in this document.

Because the merger will be governed by Section 251(h) of the DGCL, no stockholder vote will be required to consummate the merger in the event that the offer is consummated. AbbVie is required, on the terms and subject to the satisfaction or waiver of the conditions set

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forth in the merger agreement, to consummate the merger as promptly as practicable following the consummation of the offer. As such, AbbVie does not expect there to be a significant period of time between the consummation of the offer and the consummation of the merger.

What are the U.S. federal income tax consequences of receiving shares of AbbVie common stock and/or cash in exchange for my Pharmacyclics shares in the merger?

The offer and the merger, taken together, are intended to qualify as a "reorganization" within the meaning of Section 368(a) of the Code. If the offer and the merger, taken together, qualify as a "reorganization" within the meaning of Section 368(a) of the Code, the U.S. federal income tax consequences to Pharmacyclics stockholders who are U.S. persons and receive shares of AbbVie common stock and/or cash in exchange for their shares pursuant to the offer and/or the merger generally will be as follows:

Each Pharmacyclics stockholder should read the discussion under "The Offer—Material U.S. Federal Income Tax Consequences" and should consult its own tax advisor for a full understanding of the tax consequences of the offer and the merger to such stockholder.

Will I have the right to have my Pharmacyclics shares appraised?

Appraisal rights are not available in connection with the offer, and Pharmacyclics stockholders who tender their shares in the offer will not have appraisal rights in connection with the merger. However, if the Offeror accepts shares in the offer and the merger is completed, holders of Pharmacyclics shares will be entitled to exercise appraisal rights in connection with the merger if they did not tender Pharmacyclics shares in the offer, subject to and in accordance with applicable Delaware law. Pharmacyclics stockholders who comply with the applicable statutory procedures under the DGCL will be entitled to receive a judicial determination of the fair value of their Pharmacyclics shares (exclusive of any element of value arising from the accomplishment or expectation of the merger) and to receive payment of such fair value in cash. Any such judicial determination of the fair value of Pharmacyclics shares could be based upon considerations other than, or in addition to, the price paid in the offer and the market value of Pharmacyclics shares. The value so determined could be higher or lower than the price per Pharmacyclics share paid by AbbVie or the Offeror pursuant to the offer and the merger. You should be aware that opinions of investment banking firms as to the fairness from a financial point of view of the consideration payable in a sale transaction, such as the offer

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and the merger, are not opinions as to fair value under applicable Delaware law.

Under Section 262 of the DGCL, where a merger is approved under Section 251(h), either a constituent corporation before the effective date of the merger, or the surviving corporation within ten days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of Section 262 of the DGCL. The Schedule 14D-9 will constitute the formal notice of appraisal rights under Section 262 of the DGCL.

The foregoing summary of the rights of dissenting stockholders under the DGCL does not purport to be a complete statement of the procedures to be followed by Pharmacyclics stockholders desiring to exercise any available appraisal rights under Section 262 of the DGCL, and is qualified in its entirety by the full text of Section 262 of the DGCL. See "The Offer—Dissenters' Rights."

Who should I call if I have questions about the offer?

If you have questions about the offer, or to obtain indicative information regarding the number of shares of AbbVie common stock to be included in the mixed consideration and the stock consideration on any date while the offer is outstanding, calculated as if such date were the expiration date of the offer (or, beginning on April 30, 2015, final information), you may call Georgeson Inc., the information agent, toll free at (888) 680-1528 or contact them via e-mail at PCYC@georgeson.com.

Where can I find more information about AbbVie and Pharmacyclics?

You can find more information about AbbVie and Pharmacyclics from various sources described in the section of this document entitled "Where To Obtain More Information."

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SUMMARY

        This section summarizes material information presented in greater detail elsewhere in this document. However, this summary does not contain all of the information that may be important to Pharmacyclics stockholders. You are urged to carefully read the remainder of this document and the related letter of election and transmittal and the other documents to which we have referred because the information in this section is not complete. See "Where To Obtain More Information."

The Offer (Page 21)

AbbVie, through its direct wholly owned subsidiary Oxford Amherst Corporation (the "Offeror"), is offering to exchange for each outstanding share of common stock of Pharmacyclics validly tendered and not properly withdrawn in the offer:

We refer to the above as the "mixed consideration." In lieu of receiving the mixed consideration, holders of Pharmacyclics shares may elect to receive, for each Pharmacyclics share that they hold, either (1) $261.25 in cash (we refer to this election as the "all-cash election" and this amount as the "all-cash consideration") or (2) a number of shares of AbbVie common stock equal to $261.25 divided by the volume weighted average sale price per share of AbbVie common stock as reported on the NYSE for the ten consecutive trading days ending on and including the second trading day prior to the final expiration date of the offer, as calculated by Bloomberg Financial LP under the function "ABBV UN Equity AQR" (we refer to this election as the "all-stock election" and this amount as the "all-stock consideration"). Holders of Pharmacyclics shares may contact Georgeson Inc., the information agent, toll free at (888) 680-1528 to obtain indicative information regarding the number of shares of AbbVie common stock to be included in the mixed consideration and the stock consideration on any date while the offer is outstanding, calculated as if such date were the expiration date of the offer (or, beginning on April 30, 2015, final information).

Pharmacyclics stockholders who tender their Pharmacyclics shares into the offer and do not make a valid election will receive the mixed consideration for their Pharmacyclics shares. Pharmacyclics stockholders who make the all-cash election or the all-stock election will be subject to proration to ensure that approximately 41.7% of the aggregate consideration in the offer will be paid in shares of AbbVie common stock and approximately 58.3% of the aggregate consideration in the offer (as reduced by the Pharmacyclics shares held by stockholders who have properly exercised and perfected dissenters' rights under the DGCL) will be paid in cash. See "The Offer—Elections and Proration" for a description of the proration procedure.

Pharmacyclics stockholders will not receive any fractional shares of AbbVie common stock in the offer. No fractional shares of AbbVie common stock will be issuable in the offer or the merger and each Pharmacyclics stockholder who otherwise would be entitled to receive a fraction of a share of AbbVie common stock pursuant to the offer or the merger will be paid an amount in cash (without interest) equal to such fractional part of a share of AbbVie common stock multiplied by the volume weighted average sale price per share of AbbVie common stock as reported on the NYSE for the ten consecutive trading days ending on and including the second trading day prior to the final expiration date of the offer, as calculated by Bloomberg Financial LP under the function "ABBV UN Equity AQR." See "The Offer—Fractional Shares."

 

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Purpose of the Offer; The Merger (Page 58)

The purpose of the offer is for AbbVie to acquire control of, and ultimately the entire equity interest in, Pharmacyclics. The offer is the first step in AbbVie's plan to acquire all of the outstanding Pharmacyclics shares. AbbVie intends to consummate the merger promptly after (and on the same date as) the consummation of the offer. The purpose of the merger is for AbbVie to acquire all Pharmacyclics shares that it did not acquire in the offer.

In the first merger, each outstanding Pharmacyclics share that was not acquired by AbbVie or the Offeror will be converted into the mixed consideration or, at the election of the holder of such shares, the all-cash consideration or all-stock consideration, subject to proration to ensure that approximately 41.7% of the aggregate consideration in the first merger will be paid in shares of AbbVie common stock and approximately 58.3% of the aggregate consideration in the first merger will be paid in cash.

After the merger, the Pharmacyclics business will be held in a wholly owned subsidiary of AbbVie, and the former Pharmacyclics stockholders will no longer have any direct ownership interest in such entity. Immediately following the first merger, AbbVie will consummate the second merger, in which the surviving corporation in the first merger will merge with and into Merger Sub 2, with Merger Sub 2 surviving the second merger.

AbbVie expects to consummate the merger promptly after (and on the same date as) the consummation of the offer in accordance with Section 251(h) of the DGCL, and no stockholder vote to adopt the merger agreement or any other action by the Pharmacyclics stockholders will be required in connection with the merger. See "The Offer—Purpose of the Offer and the Merger—Dissenters' Rights."

The Companies (Page 19)

AbbVie is a global, research-based biopharmaceutical company. AbbVie develops and markets advanced therapies that address some of the world's most complex and serious diseases. AbbVie products are used to treat chronic autoimmune diseases, including rheumatoid arthritis, psoriasis, and Crohn's disease; hepatitis C (HCV); human immunodeficiency virus (HIV); endometriosis; thyroid disease; Parkinson's disease; complications associated with chronic kidney disease (CKD) and cystic fibrosis; and other health conditions such as low testosterone. AbbVie also has a pipeline of promising new medicines, including more than 30 compounds or indications in Phase 2 or Phase 3 development across such important medical specialties as immunology, virology/liver disease, oncology, renal disease, neurological diseases and women's health. AbbVie has approximately 26,000 employees and its products are sold in over 170 countries.

AbbVie was incorporated in Delaware on April 10, 2012. On January 1, 2013, AbbVie became an independent, publicly-traded company as a result of the distribution by Abbott Laboratories ("Abbott") of 100% of the outstanding common stock of AbbVie to Abbott's shareholders. AbbVie's common stock began trading "regular-way" under the ticker symbol "ABBV" on the NYSE on January 2, 2013.

The Offeror, a Delaware corporation, is a wholly owned subsidiary of AbbVie. The Offeror is newly formed, and was organized for the purpose of making the offer and consummating the merger. The Offeror has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the offer and the merger.

 

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Merger Sub 2, a Delaware limited liability company, is a wholly owned subsidiary of AbbVie. Merger Sub 2 is newly formed, and was organized for the purpose of consummating the merger. Merger Sub 2 has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the merger.

Pharmacyclics, a Delaware corporation, is a biopharmaceutical company that develops and commercializes novel therapies intended to improve quality of life, increase duration of life and resolve medical needs for people impacted by cancer and immune-mediated diseases. Pharmacyclics markets IMBRUVICA® (ibrutinib) and has several other product candidates in clinical development and preclinical molecules in lead optimization. Pharmacyclics focuses on developing therapies for blood cancers, select solid tumors and immune-mediated disorders. Pharmacyclics is headquartered in Sunnyvale, California and has operations in select areas internationally.

Reasons for the Offer (Page 30)

The purpose of the offer is for AbbVie to acquire control of, and ultimately the entire equity interest in, Pharmacyclics. The Offeror is making the offer and AbbVie plans to complete the merger because it believes that the acquisition of Pharmacyclics by AbbVie will provide significant beneficial long-term growth prospects and increased stockholder value for the combined company.

Expiration of the Offer (Page 52)

The offer is scheduled to expire at 5:00 p.m., New York City time, on May 1, 2015, unless extended by the Offeror. "Expiration date" means May 1, 2015, unless and until the Offeror has extended the period during which the offer is open, subject to the terms and conditions of the merger agreement, in which event the term "expiration date" means the latest time and date at which the offer, as so extended by the Offeror, will expire.

Extension, Termination or Amendment (Page 52)

Subject to the provisions of the merger agreement and the applicable rules and regulations of the SEC, and unless Pharmacyclics consents otherwise or the merger agreement is otherwise terminated, the Offeror must (1) extend the offer in the event that any of the conditions to the offer (including the minimum tender condition) have not been satisfied or waived as of any then scheduled expiration of the offer, for periods of up to ten business days each in order to further seek to satisfy the conditions to the offer, and (2) extend the offer for the minimum period required by any rule, regulation, interpretation or position of the SEC or its staff or NASDAQ which is applicable to the offer or to the extent necessary to resolve any comments of the SEC or its staff applicable to the offer or the Schedule TO.

The Offeror will effect any extension, termination, amendment or delay by giving oral or written notice to the exchange agent and by making a public announcement as promptly as practicable thereafter as described under "The Offer—Extension, Termination and Amendment." In the case of an extension, any such announcement will be issued no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled expiration date. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that any material change in the information published, sent or given to stockholders in connection with the offer be promptly disseminated to stockholders in a manner reasonably designed to inform them of such change) and without limiting the manner in which the Offeror may choose to make any public announcement, the Offeror assumes no obligation to publish, advertise or otherwise communicate any such public announcement of

 

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this type other than by issuing a press release. During any extension, Pharmacyclics shares previously tendered and not properly withdrawn will remain subject to the offer, subject to the right of each Pharmacyclics stockholder to withdraw previously tendered Pharmacyclics shares.

The merger agreement provides that the merger agreement may be terminated if the offer has not been consummated on or before September 4, 2015, and the Offeror may not extend the offer beyond such date without the prior written consent of Pharmacyclics (except that such date may be extended by either AbbVie or Pharmacyclics to December 3, 2015 if certain regulatory conditions to the offer have not been satisfied by September 4, 2015).

No subsequent offering period will be available following the expiration of the offer.

Significant Conditions of the Offer (Page 61)

The offer is subject to certain conditions, including:

Subject to applicable SEC rules and regulations, the Offeror also reserves the right, in its sole discretion, at any time or from time to time to waive any condition identified as subject to waiver in "The Offer—Conditions of the Offer" by giving oral or written notice of such waiver to the exchange agent. However, certain specified conditions (including the first six conditions in the immediately preceding list) may only be waived by AbbVie or the Offeror with the express written consent of Pharmacyclics.

Withdrawal Rights (Page 54)

Tendered Pharmacyclics shares may be withdrawn at any time prior to the expiration date. Additionally, if the Offeror has not agreed to accept the shares for exchange on or prior to May 21, 2015, Pharmacyclics stockholders may thereafter withdraw their shares from tender at any time after such date until the Offeror accepts the shares for exchange. Once the Offeror accepts shares for exchange pursuant to the offer, all tenders not previously withdrawn become irrevocable.

Procedure for Tendering (Page 55)

To validly tender Pharmacyclics shares pursuant to the offer, Pharmacyclics stockholders must:

 

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Pharmacyclics stockholders who hold Pharmacyclics shares in "street name" through a bank, broker or other nominee holder, and desire to tender their Pharmacyclics shares pursuant to the offer, should instruct the nominee holder to do so prior to the expiration date.

Exchange of Shares; Delivery of Cash and Shares of AbbVie Common Stock (Page 53)

Upon the terms and subject to the satisfaction or waiver of the conditions of the offer (including, if the offer is extended or amended, the terms and conditions of any extension or amendment), as soon as practicable following the expiration date, the Offeror will accept for exchange, and will exchange, all Pharmacyclics shares validly tendered and not properly withdrawn prior to the expiration date.

Elections and Proration (Page 50)

Pharmacyclics stockholders may elect to receive the mixed consideration, the all-cash consideration or the all-stock consideration in exchange for each Pharmacyclics share validly tendered and not properly withdrawn pursuant to the offer, subject in each case to the election procedures and, in the case of elections of the all-cash consideration or the all-stock consideration, to the proration procedures described in this document and the related letter of election and transmittal, by indicating their elections in the applicable section of the letter of election and transmittal. If a Pharmacyclics stockholder decides to change its election after tendering its Pharmacyclics shares, it must first properly withdraw the tendered Pharmacyclics shares and then re-tender the shares prior to the expiration date, with a new letter of election and transmittal that indicates the revised election.

Certain Legal Matters; Regulatory Approvals (Page 63)

The offer and the merger cannot be consummated until certain information that AbbVie and Pharmacyclics have furnished to the Antitrust Division of the Department of Justice (the "DOJ") and the Federal Trade Commission (the "FTC") has been reviewed and certain waiting period requirements have been satisfied. These requirements and other issues are discussed under "The Offer—Certain Legal Matters; Regulatory Approvals."

Source and Amount of Funds (Page 70)

The offer and the merger are not conditioned upon any financing arrangements or contingencies.

Assuming all Pharmacyclics equity incentive awards vest and tender into the offer, the Offeror estimates the amounts required to purchase the outstanding shares and consummate the merger will be approximately $21 billion, including $12.2 billion of cash, plus related fees and expenses. AbbVie has entered into a 364-Day Bridge Term Loan Credit Agreement (the "bridge loan agreement") with the various financial institutions named therein, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent for the lenders. The bridge loan agreement provides for an $18.0 billion term facility under which, subject to the satisfaction of certain conditions, AbbVie may request up to two borrowings: (i) one in an amount up to $18.0 billion on the first date on which the offer is consummated and the conditions to funding of the bridge loan agreement have been satisfied (the "bridge closing date") and (ii) one on any date within 60 days after the bridge closing date in an amount up to the lesser of $6.0 billion and the amount of the $18.0 billion commitment remaining after the initial borrowing. AbbVie currently expects to finance the offer and the merger on a permanent basis with a combination of the issuance and/or arrangement of new debt and available cash, including pursuant to underwritten notes offerings of AbbVie. See "The Offer—Source and Amount of Funds."

Dissenters' Rights (Page 75)

No dissenters' rights are available in connection with the offer, and Pharmacyclics stockholders who tender their shares in the offer will not have dissenters' rights in connection with the merger. However, Pharmacyclics stockholders who do not tender Pharmacyclics shares in the offer would have dissenters' rights under Delaware law in

 

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connection with the merger, subject to and in accordance with Delaware law. See "The Offer—Purpose of the Offer and the Merger—Dissenters' Rights."

Comparative Market Price and Dividend Matters (Page 92)

AbbVie common stock is listed on the NYSE under the symbol "ABBV," and Pharmacyclics shares are listed on the NASDAQ under the symbol "PCYC." On February 24, 2015, the trading day prior to public reports that Pharmacyclics was exploring options, including a sale of the company, the closing price per Pharmacyclics share on the NASDAQ was $188.45, and the closing price per share of AbbVie common stock on the NYSE was $60.87. On March 4, 2015, the trading day before the public announcement of the execution of the merger agreement, the closing price per Pharmacyclics share on the NASDAQ was $230.48, and the closing price per share of AbbVie common stock on the NYSE was $60.27. On April 16, 2015, the most recent trading date prior to the filing of this document, the closing price per Pharmacyclics share on the NASDAQ was $258.02, and the closing price per share of AbbVie common stock on the NYSE was $62.59. Pharmacyclics stockholders should obtain current market quotations for Pharmacyclics shares and shares of AbbVie common stock before deciding whether to tender their Pharmacyclics shares in the offer and before electing the form of offer consideration they wish to receive. See "Comparative Market Price and Dividend Matters" for a discussion of pro forma per share data.

Ownership of AbbVie After the Offer and the Merger (Page 57)

AbbVie estimates that (assuming all Pharmacyclics stock options are exercised and all shares underlying Pharmacyclics equity incentive awards are tendered in the offer) former Pharmacyclics stockholders would own, in the aggregate, approximately 8.6% of the shares of AbbVie common stock outstanding after the merger. For a detailed discussion of the assumptions on which this estimate is based, see "The Offer—Ownership of AbbVie After the Offer and the Merger."

Comparison of Stockholders' Rights (Page 111)

The rights of AbbVie stockholders are different in some respects from the rights of Pharmacyclics stockholders. Therefore, Pharmacyclics stockholders will have different rights as stockholders once they become AbbVie stockholders. The differences are described in more detail under "Comparison of Stockholders' Rights."

Material U.S. Federal Income Tax Consequences (Page 104)

The offer and the merger, taken together, are intended to qualify as a "reorganization" within the meaning of Section 368(a) of the Code. If the offer and the merger, taken together, qualify as a "reorganization" within the meaning of Section 368(a) of the Code, the U.S. federal income tax consequences to Pharmacyclics stockholders who are U.S. persons and receive shares of AbbVie common stock and/or cash in exchange for their shares pursuant to the offer and/or the merger generally will be as follows:

 

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Each Pharmacyclics stockholder should read the discussion under "Material U.S. Federal Income Tax Consequences" and should consult its own tax advisor for a full understanding of the tax consequences of the offer and the merger to such stockholder.

Accounting Treatment (Page 71)

In accordance with accounting principles generally accepted in the United States, AbbVie will account for the acquisition of shares through the transaction under the acquisition method of accounting for business combinations.

Questions about the Offer and the Merger

Questions or requests for assistance or additional copies of this document may be directed to the information agent at the telephone number and addresses set forth below. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the offer.

The information agent for the Offer is:

GRAPHIC

480 Washington Blvd., 26th Floor
Jersey City, New Jersey 07310

Banks, Brokers and Stockholders
Call Toll-Free (888) 680-1528
Or Contact via E-mail at:
PCYC@georgeson.com

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF ABBVIE

        The following table sets forth selected financial information for AbbVie as of the end of and for the periods indicated. The selected financial information of AbbVie for the periods from 2010 to 2014 are derived from its (i) audited consolidated financial statements as of and for the years ended December 31, 2014 and 2013; and (ii) audited combined financial statements as of and for the years ended December 31, 2012, 2011 and 2010.

        On January 1, 2013, AbbVie became an independent company as a result of the distribution by Abbott Laboratories ("Abbott") of 100% of the outstanding common stock of AbbVie to Abbott's stockholders. The historical financial statements of AbbVie for periods prior to January 1, 2013 were prepared on a stand-alone basis and were derived from Abbott's consolidated financial statements and accounting records as if the former research-based pharmaceutical business of Abbott had been part of AbbVie for all periods presented. Accordingly, AbbVie's financial statements for periods prior to January 1, 2013 are presented on a combined basis and reflect AbbVie's financial position, results of operations and cash flows as its business was operated as part of Abbott prior to the separation of AbbVie from Abbott, in conformity with U.S. generally accepted accounting principles.

        The historical financial statements for periods prior to January 1, 2013 also reflected an allocation of expenses related to certain Abbott corporate functions, including senior management, legal, human resources, finance, information technology and quality assurance. These expenses were allocated to AbbVie based on direct usage or benefit where identifiable, with the remainder allocated on a pro rata basis of revenues, headcount, square footage, number of transactions or other measures. AbbVie considers the expense allocation methodology and results to be reasonable. However, the allocations may not be indicative of the actual expenses that would have been incurred had AbbVie operated as an independent, stand-alone, publicly-traded company for the periods presented. Accordingly, the historical financial information presented for periods prior to January 1, 2013 may not be indicative of the results of operations or financial position that would have been achieved if AbbVie had been an independent, stand-alone, publicly-traded company during the periods shown or of AbbVie's performance for periods subsequent to December 31, 2012. Refer to "Basis of Historical Presentation" and "Transition from Abbott and Cost to Operate as an Independent Company" included under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of AbbVie's Annual Report on Form 10-K for the period ended December 31, 2014, previously filed with the SEC on February 20,

 

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2015 and incorporated by reference into this document. Historical results are not necessarily indicative of any results to be expected in the future. See "Where to Obtain More Information."

(in millions, except per share and ratio data)
  2014   2013   2012   2011   2010  

Statement of earnings data

                               

Net sales

  $ 19,960   $ 18,790   $ 18,380   $ 17,444   $ 15,638  

Net earnings(a)

  $ 1,774   $ 4,128   $ 5,275   $ 3,433   $ 4,178  

Basic earnings per share(a)

  $ 1.11   $ 2.58   $ 3.35   $ 2.18   $ 2.65  

Diluted earnings per share(a)

  $ 1.10   $ 2.56   $ 3.35   $ 2.18   $ 2.65  

Cash dividends declared per share

  $ 1.75   $ 2.00 (b)   n/a     n/a     n/a  

Weighted-average basic shares outstanding(c)

    1,595     1,589     1,577     1,577     1,577  

Weighted-average diluted shares outstanding(c)

    1,610     1,604     1,577     1,577     1,577  

Balance sheet data

                               

Total current assets

  $ 16,088   $ 17,848   $ 15,354   $ 7,354   $ 8,218  

Total assets

  $ 27,547   $ 29,198   $ 27,008   $ 19,521   $ 21,135  

Total current liabilities

  $ 11,400   $ 6,879   $ 6,776   $ 5,897   $ 3,761  

Total liabilities

  $ 25,805   $ 24,706   $ 23,645   $ 7,589   $ 5,432  

Long-term debt and lease obligations(d)

  $ 14,586   $ 14,310   $ 14,652   $ 48   $ 52  

Ratio of earnings to fixed charges

    6.0     16.6     41.3     132.0     180.1  

(a)
Results for the years ended December 31, 2014 and 2013 included higher expenses associated with operating as an independent, stand-alone publicly traded company than the historically derived financial statements. The increases include the impact of interest expense on debt issued in November 2012, a higher tax rate and other full year incremental costs of operating as an independent company. In addition, results for the year ended December 31, 2014 include after-tax transaction and financing-related costs totaling $1.8 billion, or $1.12 per share, incurred in connection with the terminated proposed combination with Shire plc (Shire), a $750 million after-tax charge related to a research and development collaboration agreement with Calico Life Sciences LLC (Calico), and a $173 million after-tax charge as a result of entering into a global collaboration with Infinity Pharmaceuticals, Inc. (Infinity). Refer to Notes 4 and 6 to the audited consolidated financial statements included under Item 8, "Financial Statements and Supplementary Data" contained in AbbVie's Annual Report on Form 10-K for the year ended December 31, 2014 for further information relating to the termination of the proposed combination with Shire and the collaborations with Calico and Infinity, respectively.

(b)
AbbVie declared regular quarterly cash dividends in 2013 aggregating $1.60 per share of common stock. In addition, a cash dividend of $0.40 per share of common stock was declared from pre-separation earnings on January 4, 2013 and was recorded as a reduction of additional paid-in capital. Refer to Note 12 to the audited consolidated financial statements included under Item 8, "Financial Statements and Supplementary Data" contained in AbbVie's Annual Report on Form 10-K for the year ended December 31, 2014 for additional information regarding cash dividends declared in 2013.

(c)
On January 1, 2013, Abbott distributed 1,577 million shares of AbbVie common stock. For periods prior to the separation, the weighted-average basic and diluted shares outstanding were based on the number of shares of AbbVie common stock outstanding on the distribution date. Refer to Note 5 to the audited consolidated financial statements included under Item 8, "Financial Statements and Supplementary Data" contained in AbbVie's Annual Report on Form 10-K for the year ended December 31, 2014 for information regarding the calculation of basic and diluted earnings per common share for the years ended December 31, 2014 and 2013.

(d)
Also includes current portion of long-term debt and lease obligations.

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF PHARMACYCLICS

        The following table sets forth summary consolidated financial data for Pharmacyclics as of and for each of the two years ended December 31, 2014 and 2013, as of and for the six months ended December 31, 2012, and as of and for the years ended June 30, 2012, 2011 and 2010. On November 14, 2012, the Pharmacyclics board of directors approved a change in its fiscal year end from June 30 to December 31, effective December 31, 2012. All references to "fiscal years," unless otherwise noted, refer to the twelve-month fiscal year, which prior to July 1, 2012, ended on June 30, and beginning on January 1, 2013, end on December 31, of each year.

        The summary consolidated financial data as of and for each of the years ended December 31, 2014 and 2013, for the six months ended December 31, 2012, and for the year ended June 30, 2012 was derived from Pharmacyclics' audited consolidated financial statements included in its Annual Report on Form 10-K for the period ended December 31, 2014, previously filed with the SEC on February 18, 2015 and incorporated by reference into this document. The summary consolidated financial data for the years ended June 30, 2011 and 2010 are derived from Pharmacyclics' audited consolidated financial statements which are not incorporated by reference into this document.

        Such financial data should be read together with, and is qualified in its entirety by reference to, Pharmacyclics' historical consolidated financial statements and the accompanying notes and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" which are set forth in such Annual Report on Form 10-K.

 
  Years Ended
December 31,
  Six Months
Ended
December 31,
  Years Ended June 30,  
(in millions, except per share data)
  2014   2013   2012   2012   2011   2010  

Statement of earnings data

                                     

Net sales(1)

  $ 730   $ 260   $ 161   $ 82   $ 8   $ 9  

Net earnings (loss)

  $ 86   $ 67   $ 118   $ 12   $ (35 ) $ (15 )

Basic earnings (loss) per share

  $ 1.14   $ 0.92   $ 1.69   $ 0.17   $ (0.59 ) $ (0.31 )

Diluted earnings (loss) per share          

  $ 1.10   $ 0.87   $ 1.58   $ 0.17   $ (0.59 ) $ (0.31 )

Cash dividends declared per share

  $   $   $   $   $   $  

Weighted-average basic shares outstanding

    75     73     70     69     60     48  

Weighted-average diluted shares outstanding

    78     77     74     73     60     48  

Balance sheet data

                                     

Total current assets

  $ 1,016   $ 741   $ 346   $ 213   $ 115   $ 76  

Total assets

  $ 1,060   $ 769   $ 355   $ 219   $ 116   $ 77  

Total current liabilities

  $ 194   $ 88   $ 29   $ 19   $ 14   $ 10  

Total liabilities

  $ 231   $ 141   $ 93   $ 87   $ 15   $ 10  

Long-term debt and lease obligations

  $   $   $   $   $   $  

(1)
Net sales include product sales, license and milestone revenue and collaboration services revenues.

 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

        The following selected unaudited pro forma condensed combined financial data has been prepared to reflect the acquisition of Pharmacyclics by AbbVie. On March 4, 2015, AbbVie announced that it had entered into a definitive agreement to acquire all of the outstanding shares of Pharmacyclics pursuant to the offer and the merger.

        The unaudited pro forma condensed combined balance sheet combines the historical consolidated balance sheets of AbbVie and Pharmacyclics as of December 31, 2014, giving effect to the merger as if it had occurred on December 31, 2014. The unaudited pro forma condensed combined statement of earnings combines the historical consolidated statements of income of AbbVie and Pharmacyclics for the year ended December 31, 2014, giving effect to the merger as if it had occurred on January 1, 2014. The unaudited pro forma ratio of earnings to fixed charges combines the historical information of AbbVie and Pharmacyclics for the year ended December 31, 2014, giving effect to the merger as if it had occurred on January 1, 2014. The pro forma financial information does not give effect to the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies, or any other synergies that may result from the merger and changes in commodity and share prices.

        The summary selected unaudited pro forma condensed combined financial information has been prepared for informational purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of AbbVie would have been had the merger occurred on the dates assumed, nor is this information necessarily indicative of future consolidated results of operations or financial position. The following information has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and the related notes included in this document.

Selected Unaudited Pro Forma Condensed Combined Statement of Earnings

(in millions, except per share data)
  Year ended
December 31,
2014
 

Net sales

  $ 20,676  

Net earnings

  $ 1,068  

Earnings per share—basic

  $ 0.62  

Earnings per share—diluted

  $ 0.61  

Weighted-average shares outstanding—basic

    1,731  

Weighted-average shares outstanding—diluted

    1,746  

Selected Unaudited Pro Forma Condensed Combined Balance Sheet

(in millions)
  December 31, 2014  

Total assets

  $ 51,653  

Total liabilities

  $ 41,854  

Total stockholders' equity

  $ 9,799  

Ratio of Earnings to Fixed Charges

 
  Year ended
December 31, 2014
 

Ratio of earnings to fixed charges

    2.2  

 

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COMPARATIVE PER SHARE DATA
(UNAUDITED)

        The following table reflects historical information about basic and diluted income per share, cash dividends per share, and book value per share for the year ended December 31, 2014, on a historical basis, and for AbbVie and Pharmacyclics on an unaudited pro forma combined basis after giving effect to the offer and the merger. The pro forma data of the combined company assumes the acquisition of 100% of the shares by AbbVie and was derived by combining the historical consolidated financial information of AbbVie and Pharmacyclics as described elsewhere in this document. The actual percentage of cash and AbbVie common stock that a Pharmacyclics stockholder electing the all-cash consideration or the all-stock consideration will receive depends upon the trading price of AbbVie common stock at closing and such stockholder's election and the elections made by other Pharmacyclics stockholders and any resulting proration. For a discussion of the assumptions and adjustments made in preparing the pro forma financial information presented in this document, see "Unaudited Pro Forma Condensed Combined Financial Statements."

        Pharmacyclics stockholders should read the information presented in the following table together with the historical financial statements of AbbVie and Pharmacyclics and the related notes which are incorporated herein by reference, and the "Unaudited Pro Forma Condensed Combined Financial Statements" appearing elsewhere in this document. The pro forma data is unaudited and for illustrative purposes only. Pharmacyclics stockholders should not rely on this information as being indicative of the historical results that would have been achieved during the periods presented had the companies always been combined or the future results that the combined company will achieve after the consummation of the offer and the merger. This pro forma information is subject to risks and uncertainties, including those discussed in "Risk Factors."

 
  AbbVie
Historical
  Pharmacyclics
Historical
  Pro Forma
Combined
  Pro Forma
Equivalent
Pharmacyclics
Share
 

Net income per share attributable to common stockholders for the year ended December 31, 2014:

                         

Basic earnings per share

  $ 1.11   $ 1.14   $ 0.62   $ 0.05  

Diluted earnings per share

  $ 1.10   $ 1.10   $ 0.61   $ 0.05  

Cash dividends declared per share for the year ended December 31, 2014

  $ 1.75         n/a     n/a  

Book value per share as of December 31, 2014

  $ 1.09   $ 10.92   $ 5.66   $ 0.44  

 

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RISK FACTORS

        Pharmacyclics stockholders should carefully read this document and the other documents referred to or incorporated by reference into this document, including in particular the following risk factors, in deciding whether to tender shares pursuant to the offer.

Risk Factors Relating to the Offer

         The market price of AbbVie common stock may decline after the consummation of the offer and the merger.

        The market price of AbbVie common stock may decline after the offer and the merger are completed because, among other things, AbbVie may not achieve the expected benefits of the acquisition of Pharmacyclics as rapidly or to the extent anticipated, or at all; Pharmacyclics' business may not perform as anticipated following the acquisition; the effect of AbbVie's acquisition of Pharmacyclics on AbbVie's financial results may not meet the expectations of AbbVie, financial analysts or investors; the addition of Pharmacyclics' business may be unsuccessful, take longer or be more disruptive than anticipated; or AbbVie's credit rating may be downgraded as a result of AbbVie's increased indebtedness incurred to finance the offer and the merger.

        As of March 19, 2015, there were 1,592,372,231 shares of AbbVie common stock outstanding, net of shares held in treasury, and held of record by approximately 55,664 stockholders, and no shares of preferred stock were outstanding. On such date, 27,135,387 shares of AbbVie common stock were subject to outstanding options, 10,162,885 shares of AbbVie common stock were subject to outstanding restricted stock units, 1,549,810 shares of AbbVie common stock were subject to outstanding restricted stock awards, and 87,622,150 shares of AbbVie common stock were unassigned and available for grant. In connection with the offer and the merger, AbbVie estimates that AbbVie could issue up to approximately 150,150,179 additional shares of AbbVie common stock, assuming that the volume weighted average price of a share of AbbVie common stock as reported on the NYSE for the ten consecutive trading days ending on and including the second trading day prior to the final expiration date of the offer is equal to $58.37. The number of shares of AbbVie common stock that will be issued in connection with the offer and the merger will increase with any decrease in such volume weighted average closing price of AbbVie common stock. Although AbbVie intends to execute an accelerated share repurchase program promptly following the closing of the merger, there is no guarantee that AbbVie will do so and an increase in the number of outstanding shares of AbbVie common stock may lead to sales of such shares or the perception that such sales may occur, either of which may adversely affect the market price of AbbVie common stock.

         Pharmacyclics stockholders may not receive all consideration in the form elected.

        Pharmacyclics stockholders electing to receive either the all-cash consideration or the all-stock consideration in the offer will be subject to proration to ensure that approximately 41.7% of the aggregate consideration in the offer will be paid in shares of AbbVie common stock, and approximately 58.3% of the aggregate consideration in the offer (as reduced by the Pharmacyclics shares held by stockholders who have properly exercised and perfected dissenters' rights under the DGCL) will be paid in cash. Similarly, Pharmacyclics stockholders electing to receive either the all-cash consideration or the all-stock consideration in the merger will be subject to proration to ensure that approximately 41.7% of the aggregate consideration in the first merger will be paid in shares of AbbVie common stock, and approximately 58.3% of the aggregate consideration in the first merger will be paid in cash. Further proration may be required to ensure the receipt of an opinion by each of AbbVie and Pharmacyclics from their respective legal counsel to the effect that the offer and the merger, taken together, will qualify as a "reorganization" within the meaning of Section 368(a) of the Code. The receipt of these opinions is a condition to the offer. Accordingly, some of the consideration a

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Pharmacyclics stockholder receives in the offer or the merger may differ from the type of consideration selected and such difference may be significant. This may result in, among other things, tax consequences that differ from those that would have resulted if the Pharmacyclics stockholder had received solely the form of consideration that you elected. A discussion of the proration mechanism can be found under the heading "The Offer—Elections and Proration" and a discussion of the material U.S. federal income tax consequences of the offer and the merger can be found under "The Offer—Material U.S. Federal Income Tax Consequences."

         The offer remains subject to conditions that AbbVie cannot control.

        The offer is subject to conditions, including that a majority of the outstanding Pharmacyclics shares have been validly tendered into the offer (and not properly withdrawn), receipt of required regulatory approvals, lack of legal prohibitions, no material adverse effect (with such term as defined in the merger agreement and described under "Merger Agreement—Termination of the Merger Agreement—Material Adverse Effect") having occurred with respect to Pharmacyclics and its subsidiaries, the truth and accuracy of Pharmacyclics' representations and warranties made in the merger agreement, Pharmacyclics and its subsidiaries being in material compliance with their covenants under the merger agreement, the listing of the shares of the AbbVie common stock to be issued in the offer and the merger being authorized for listing on the NYSE, the receipt of an opinion by each of AbbVie and Pharmacyclics from their respective legal counsel to the effect that the offer and the merger, taken together, will qualify as a "reorganization" within the meaning of Section 368(a) of the Code, and the registration statement on Form S-4 of which this document is a part becoming effective. There are no assurances that all of the conditions to the offer will be satisfied. If the conditions to the offer are not met, then AbbVie may allow the offer to expire, or could amend or extend the offer. See "The Offer—Conditions of the Offer" for a discussion of the conditions to the offer.

         Pharmacyclics stockholders who receive AbbVie common stock in the offer will become AbbVie stockholders. AbbVie common stock may be affected by different factors and AbbVie stockholders will have different rights than Pharmacyclics stockholders.

        Upon consummation of the offer, Pharmacyclics stockholders receiving shares of AbbVie common stock will become stockholders of AbbVie. AbbVie's business differs from that of Pharmacyclics, and AbbVie's results of operations and the trading price of AbbVie common stock may be adversely affected by factors different from those that would affect Pharmacyclics' results of operations and stock price.

        In addition, holders of shares of AbbVie common stock will have rights as AbbVie stockholders that differ from the rights they had as Pharmacyclics stockholders before the offer or the merger. For a detailed comparison of the rights of AbbVie stockholders to the rights of Pharmacyclics stockholders, see "Comparison of Stockholders' Rights."

         The receipt of shares of AbbVie common stock in the offer and/or the merger may be taxable to Pharmacyclics stockholders.

        The offer is contingent upon the receipt of an opinion by each of AbbVie and Pharmacyclics from their respective legal counsel to the effect that the offer and the merger, taken together, will qualify as a "reorganization" within the meaning of Section 368(a) of the Code. However, if the offer and the merger are not treated as component parts of an integrated transaction for U.S. federal income tax purposes, if the merger is not completed or if the transaction otherwise fails to qualify as a "reorganization" within the meaning of Section 368(a) of the Code, the exchange of Pharmacyclics shares for shares of AbbVie common stock in the offer and/or the merger will be taxable to such Pharmacyclics stockholders for U.S. federal income tax purposes.

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        Pharmacyclics stockholders should consult their tax advisors to determine the specific tax consequences to them of the offer and the merger, including any federal, state, local, foreign or other tax consequences, and any tax return filing or other reporting requirements.

Risk Factors Relating to AbbVie and the Combined Company

         AbbVie may fail to realize all of the anticipated benefits of the merger or those benefits may take longer to realize than expected.

        The full benefits of the transactions, including the anticipated sales or growth opportunities, may not be realized as expected or may not be achieved within the anticipated time frame, or at all. Failure to achieve the anticipated benefits of the transactions could adversely affect AbbVie's results of operations or cash flows, cause dilution to the earnings per share of AbbVie, decrease or delay the expected accretive effect of the transactions, and negatively impact the price of AbbVie common stock.

        In addition, AbbVie and Pharmacyclics will be required to devote significant attention and resources prior to closing to prepare for the post-closing operation of the combined company, and AbbVie will be required post-closing to devote significant attention and resources to successfully align the business practices and operations of AbbVie and Pharmacyclics. This process may disrupt the businesses and, if ineffective, would limit the anticipated benefits of the merger.

         AbbVie's ability to realize the anticipated benefits of the merger will depend on its ability to effectively and profitably commercialize IMBRUVICA® (ibrutinib).

        The anticipated benefits of the merger will depend on AbbVie's ability to effectively and profitably commercialize IMBRUVICA® (ibrutinib), including AbbVie's ability to:

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        The commercialization of IMBRUVICA® (ibrutinib) may not be successful for a number of reasons, including:

If the commercialization of IMBRUVICA® (ibrutinib) is unsuccessful, AbbVie's ability to generate revenue from product sales and realize the anticipated benefits of the merger will be adversely affected.

         AbbVie and Pharmacyclics will incur direct and indirect costs as a result of the offer and the merger.

        AbbVie and Pharmacyclics will incur substantial expenses in connection with and as a result of completing the offer and the merger and, following the completion of the merger, AbbVie expects to incur additional expenses in connection with combining the businesses, operations, policies and procedures of AbbVie and Pharmacyclics. Factors beyond AbbVie's control could affect the total amount or timing of these expenses, many of which, by their nature, are difficult to estimate accurately.

         AbbVie's and Pharmacyclics' actual financial positions and results of operations may differ materially from the unaudited pro forma financial data included in this document.

        The pro forma financial information contained in this document is presented for illustrative purposes only and may differ materially from what AbbVie's actual financial position or results of operations would have been had the transactions been completed on the dates indicated. The pro forma financial information has been derived from the audited and unaudited historical financial statements of AbbVie and certain adjustments and assumptions have been made regarding the combined company after giving effect to the transactions. The assets and liabilities of Pharmacyclics have been measured at fair value based on various preliminary estimates using assumptions that AbbVie management believes are reasonable utilizing information currently available. The process for estimating the fair value of acquired assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates. These estimates may be revised as additional information becomes available and as additional analyses are performed. Differences between preliminary estimates in the pro forma financial information and the final acquisition accounting will

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occur and could have a material impact on the pro forma financial information and the combined company's financial position and future results of operations.

        In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect AbbVie's financial condition or results of operations following the closing. Any potential decline in AbbVie's financial condition or results of operations may cause significant variations in the share price of AbbVie. See "Unaudited Pro Forma Condensed Combined Financial Data."

         AbbVie expects to incur significant additional debt in connection with the offer and the merger.

        AbbVie is likely to incur or assume significant additional debt in connection with the financing of the offer and the merger. AbbVie currently expects to finance the offer and the merger with a combination of available cash and the issuance and/or arrangement of new debt, including pursuant to underwritten notes offerings of AbbVie, as described in "The Offer—Source and Amount of Funds" below. AbbVie has outstanding debt and other financial obligations and significant unused borrowing capacity that subjects AbbVie to certain risks. The incurrence of additional debt in connection with the consummation of the offer and the merger could cause these risks to increase. These risks include, among other things, requiring a portion of AbbVie's cash flow from operations to make interest payments on debt and reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow AbbVie's business. In addition, AbbVie's cash flow from operations may not be sufficient to repay all of the outstanding debt as it becomes due, and AbbVie may not be able to borrow money, sell assets, or otherwise raise funds on acceptable terms, or at all, to refinance its debt. The incurrence of this additional debt could also lead AbbVie's credit rating to be downgraded.

Risks Related to AbbVie's Business

        You should read and consider the risk factors specific to AbbVie's business that will also affect the combined company after the merger. These risks are described in Part I, Item 1A of AbbVie's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and in other documents that are incorporated by reference into this document. See "Where To Obtain More Information" for the location of information incorporated by reference in this document.

Risks Related to Pharmacyclics' Business

        You should read and consider the risk factors specific to Pharmacyclics' business that will also affect the combined company after the merger. These risks are described in Part I, Item 1A of Pharmacyclics' Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and in other documents that are incorporated by reference into this document. See "Where To Obtain More Information" for the location of information incorporated by reference in this document.

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FORWARD-LOOKING STATEMENTS

        Information both included and incorporated by reference in this document may contain forward-looking statements, concerning, among other things, AbbVie's outlook, financial projections and business strategies, all of which are subject to risks, uncertainties and assumptions. These forward-looking statements are identified by their use of terms such as "intend," "plan," "may," "should," "will," "anticipate," "believe," "could," "estimate," "expect," "continue," "potential," "opportunity," "project" and similar terms. These statements are based on certain assumptions and analyses that we believe are appropriate under the circumstances. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may differ materially from those expected, estimated or projected. Management believes that these forward-looking statements are reasonable. However, we cannot guarantee that we actually will achieve these plans, intentions or expectations, including completing the offer and the merger on the terms summarized in this document. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any of them in light of new information, future events or otherwise. Factors that could have a material adverse effect on AbbVie's operations and future prospects or the consummation of the offer and the merger include, but are not limited to:

        These risks and uncertainties, along with the risk factors discussed under "Risk Factors" in this document, should be considered in evaluating any forward-looking statements contained in this document. All forward-looking statements speak only as of the date of this document. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are qualified by the cautionary statements in this section.

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THE COMPANIES

AbbVie

        AbbVie Inc., a Delaware corporation, is a global research-based biopharmaceutical company. AbbVie develops and markets advanced therapies that address some of the world's most complex and serious diseases. AbbVie products are used to treat chronic autoimmune diseases, including rheumatoid arthritis, psoriasis, and Crohn's disease; hepatitis C (HCV); human immunodeficiency virus (HIV); endometriosis; thyroid disease; Parkinson's disease; complications associated with chronic kidney disease (CKD) and cystic fibrosis; and other health conditions such as low testosterone. AbbVie also has a pipeline of promising new medicines, including more than 30 compounds or indications in Phase 2 or Phase 3 development across such important medical specialties as immunology, virology/liver disease, oncology, renal disease, neurological diseases and women's health. AbbVie has approximately 26,000 employees and its products are sold in over 170 countries.

        AbbVie was incorporated in Delaware on April 10, 2012. On January 1, 2013, AbbVie became an independent, publicly-traded company as a result of the distribution by Abbott Laboratories (Abbott) of 100% of the outstanding common stock of AbbVie to Abbott's shareholders. AbbVie common stock began trading "regular-way" under the ticker symbol "ABBV" on the NYSE on January 2, 2013.

        The address of AbbVie's principal executive offices is 1 North Waukegan Road, North Chicago, Illinois 60064. AbbVie's telephone number is (847) 932-7900.

        AbbVie also maintains an Internet site at www.abbvie.com. AbbVie's website and the information contained therein or connected thereto shall not be deemed to be incorporated herein, and you should not rely on any such information in making an investment decision.

Offeror

        Oxford Amherst Corporation, a Delaware corporation, is a wholly owned subsidiary of AbbVie. The Offeror is newly formed, and was organized for the purpose of making the offer and consummating the merger. The Offeror has engaged in no material business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the offer and the merger. The Offeror's address is c/o AbbVie Inc., 1 North Waukegan Road, North Chicago, Illinois 60064.

Merger Sub 2

        Oxford Amherst LLC, a Delaware limited liability company, is a wholly owned subsidiary of AbbVie. Merger Sub 2 is newly formed, and was organized for the purpose of consummating the merger. Merger Sub 2 has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the merger. Merger Sub 2's address is c/o AbbVie Inc., 1 North Waukegan Road, North Chicago, Illinois 60064.

Pharmacyclics

        Pharmacyclics, Inc., a Delaware corporation, is a biopharmaceutical company that develops and commercializes novel therapies intended to improve quality of life, increase duration of life and resolve medical needs for people impacted by cancer and immune-mediated diseases. Pharmacyclics markets IMBRUVICA® (ibrutinib) and has several other product candidates in clinical development and preclinical molecules in lead optimization. Pharmacyclics focuses on developing therapies for blood cancers, select solid tumors and immune-mediated disorders. Pharmacyclics is headquartered in Sunnyvale, California and has operations in select areas internationally.

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        The address of Pharmacyclics' principal executive offices is 995 E. Arques Avenue, Sunnyvale, California 94085. Pharmacyclics' telephone number is (408) 774-0330.

        Pharmacyclics also maintains an Internet site at www.pharmacyclics.com. Pharmacyclics' website and the information contained therein or connected thereto shall not be deemed to be incorporated herein, and you should not rely on any such information in making an investment decision.

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THE OFFER

General

        AbbVie, through its direct wholly owned subsidiary Oxford Amherst Corporation (the "Offeror"), is offering to exchange for each outstanding Pharmacyclics share validly tendered and not properly withdrawn in the offer:

        We refer to the above as the "mixed consideration." In lieu of receiving the mixed consideration, holders of Pharmacyclics shares may elect to receive, for each Pharmacyclics share that they hold, (1) $261.25 in cash (we refer to this election as the "all-cash election") or (2) a number of shares of AbbVie common stock equal to $261.25 divided by the volume weighted average sale price per share of AbbVie common stock as reported on the NYSE for the ten consecutive trading days ending on and including the second trading day prior to the final expiration date of the offer, as calculated by Bloomberg Financial LP under the function "ABBV UN Equity AQR" (we refer to this election as the "all-stock election").

        Pharmacyclics stockholders who tender their Pharmacyclics shares into the offer and do not make a valid election will receive the mixed consideration for their Pharmacyclics shares. Pharmacyclics stockholders who make the all-cash election or the all-stock election will be subject to proration to ensure that approximately 41.7% of the aggregate consideration in the offer will be paid in shares of AbbVie common stock and approximately 58.3% of the aggregate consideration in the offer (as reduced by the Pharmacyclics shares held by stockholders who have properly exercised and perfected dissenters' rights under the DGCL) will be paid in cash. See "The Offer—Elections and Proration" for a description of the proration procedure.

        The purpose of the offer is for AbbVie to acquire control of, and ultimately the entire equity interest in, Pharmacyclics. The offer is the first step in AbbVie's plan to acquire all of the outstanding Pharmacyclics shares. If the offer is completed, AbbVie intends to consummate promptly following (and on the same date as) the consummation of the offer a merger of the Offeror with and into Pharmacyclics, with Pharmacyclics surviving the merger (which we refer to as the "first merger"). The purpose of the first merger is for AbbVie to acquire all Pharmacyclics shares that it did not acquire in the offer. In the first merger, each outstanding Pharmacyclics share that was not acquired by AbbVie or the Offeror will be converted into the mixed consideration or, at the election of the holder of such shares, the all-cash consideration or all-stock consideration, subject to proration to ensure that approximately 41.7% of the aggregate consideration in the first merger will be paid in shares of AbbVie common stock and approximately 58.3% of the aggregate consideration in the first merger will be paid in cash. After the first merger, the Pharmacyclics business will be held in a wholly owned subsidiary of AbbVie, and the former Pharmacyclics stockholders will no longer have any direct ownership interest in the surviving corporation. Immediately following the first merger, the surviving corporation will merge with and into Merger Sub 2 (which we refer to as the "second merger" and together with the first merger, the "merger"), with Merger Sub 2 surviving the second merger under the name "Pharmacyclics."

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Background of the Offer and the Merger

        The Pharmacyclics board of directors regularly evaluates Pharmacyclics' strategic direction and ongoing business plans. As part of this evaluation, the Pharmacyclics board of directors has from time to time considered a variety of strategic alternatives for Pharmacyclics, including additional partnerships or strategic alliances with other participants in the pharmaceuticals industry, strategic licensing transactions and a possible merger of Pharmacyclics with other pharmaceutical companies.

        In mid-February 2014, Robert W. Duggan, the chairman and chief executive officer of Pharmacyclics, was approached by the chief executive officer of another biotechnology company with an offer to evaluate a potential merger between the two companies.

        In March 2014, a very preliminary discussion occurred between representatives of the two companies regarding the potential merger. Following the discussion, Pharmacyclics determined that the potential merger would not be in the best interests of the Pharmacyclics stockholders at such time, and Pharmacyclics' determination was communicated in a timely manner to the other company.

        On September 25, 2014, and again in mid-November 2014, Mr. Duggan and Maky Zanganeh, Pharmacyclics' chief operating officer, met with representatives of J.P. Morgan Securities LLC ("J.P. Morgan"), an investment bank with a long-standing relationship with Pharmacyclics, to discuss industry trends and market perspectives on Pharmacyclics. At both meetings, the representatives of J.P. Morgan informed Mr. Duggan and Ms. Zanganeh that in regular dialogue multiple pharmaceutical companies had informally expressed a potential interest in a possible strategic transaction with Pharmacyclics.

        In November and December of 2014, through a series of meetings, the Pharmacyclics board of directors conducted a substantive evaluation of Pharmacyclics' strategic direction. The Pharmacyclics board of directors considered the fact that through the normal course of market discussions over the preceding months, both Pharmacyclics and its financial advisors were of the view that Pharmacyclics could be an acquisition target. They further considered the increasingly positive preliminary results of IMBRUVICA® (ibrutinib) in additional disease settings, as well as the other products that Pharmacyclics had in development, and the fact that in the view of the Pharmacyclics board of directors neither those results nor the full potential of IMBRUVICA® (ibrutinib) in treatment of its existing approved disease indications were reflected in the trading price of Pharmacyclics' stock at that time. In addition, the Pharmacyclics board of directors determined that to realize the full value and potential of its product portfolio, and to develop a viable pipeline of products beyond IMBRUVICA® (ibrutinib), Pharmacyclics would need to further accelerate the expansion of its infrastructure, scientific management expertise and organization generally. At the same time, the Pharmacyclics board of directors considered the need to develop a succession plan and identify a potential successor to Mr. Duggan as Pharmacyclics' chief executive officer. In light of these factors, particularly the risks and challenges associated with accelerating Pharmacyclics' growth and identifying a leader to succeed Mr. Duggan, the Pharmacyclics board of directors concluded that combining with a larger strategic partner might be the most effective way to maximize value to the Pharmacyclics stockholders. As a result, the Pharmacyclics board of directors authorized Pharmacyclics' senior management to engage in discussions with financial advisors, to conduct an orderly strategic process with those potential partners most likely and able to consummate a transaction, to explain to such potential partners in detail the factors driving the potential upside of the Pharmacyclics business, and to evaluate further whether such a combination would be in the best interests of Pharmacyclics' stockholders.

        On December 7, 2014, during the American Society of Hematology's Annual Meeting, Mr. Duggan and Ms. Zanganeh met with representatives of Centerview Partners LLC ("Centerview"), another investment bank with whom the Company maintained regular contact, to discuss industry trends and market perspectives on Pharmacyclics. Representatives of Centerview stated that in regular dialogue multiple pharmaceutical companies had informally expressed a potential interest in a possible strategic

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transaction with Pharmacyclics. The meeting included a discussion regarding planning, timelines and strategies for a potential bid solicitation process for a potential merger or other business combination involving Pharmacyclics.

        On December 10, 2014, Mr. Duggan and Ms. Zanganeh met with a representative of J.P. Morgan, during which the participants discussed whether one or more pharmaceutical companies might have a potential interest in a possible strategic transaction with Pharmacyclics. The meeting included a discussion regarding planning, timelines and strategies for a potential bid solicitation process for a potential merger or other business combination involving Pharmacyclics. It was discussed that the upcoming J.P. Morgan Healthcare Conference would be a logical time to arrange senior management meetings for Mr. Duggan with senior representatives of potentially interested parties.

        On December 10, 2014, Mr. Duggan informed a senior executive of a pharmaceutical company (referred to as "Party A") that there was a strong likelihood that Pharmacyclics was being viewed as a potential merger partner by several pharmaceutical companies. Mr. Duggan inquired as to whether Party A would be interested in being a part of a bid solicitation process, were Pharmacyclics to initiate one. Mr. Duggan was informed that Party A would respond within a day or so. On the following day, Mr. Duggan was told that Party A was very interested in participating in such a process.

        From December 2014 through February 2015, the Pharmacyclics senior management team developed certain financial projections, and provided such projections to J.P. Morgan and Centerview.

        On December 16, 2014, Mr. Duggan and Ms. Zanganeh discussed with executives of Party A timing and logistics of conducting due diligence and scheduling sessions with the management teams.

        Also on December 16, 2014, and again on December 19, 2014, Mr. Duggan, Ms. Zanganeh and Mr. Manmeet Soni, the chief financial officer of Pharmacyclics, met with representatives of Centerview to discuss planning, timelines and strategies for a potential solicitation process for a sale of the Company.

        Between December 20, 2014 and January 9, 2015, members of Pharmacyclics senior management met with representatives of Centerview and J.P. Morgan on various occasions to continue discussions regarding planning, timelines and strategies for a potential solicitation process for a potential merger or other business combination involving Pharmacyclics.

        From January 6, 2015 to January 11, 2015, the Pharmacyclics senior management team, together with representatives of Centerview and J.P. Morgan, discussed the potential list of pharmaceutical companies that would be most likely to be interested in, and have the financial capacity to consummate, a merger with Pharmacyclics. The Pharmacyclics senior management team considered that, based in part on input from Centerview and J.P. Morgan, for a variety of reasons, including financial capability or potential strategic fit with Pharmacyclics, the most likely interested parties consisted of five major pharmaceutical companies: Party A (with whom contact had already been initiated, as described above), AbbVie, Party B, Party C and Party D.

        In January 2015, Mr. Duggan discussed the parties identified by the Pharmacyclics senior management team and Centerview and J.P. Morgan with several members of the Pharmacyclics board of directors on an individual basis and each of those members of the Pharmacyclics board of directors confirmed the Pharmacyclics senior management team's conclusions.

        Representatives of Centerview contacted representatives of Party C and Party B on January 9, 2015 and January 10, 2015, respectively, in each case to gauge each party's interest in exploring a potential merger with Pharmacyclics.

        On January 12, 2015, at the J.P. Morgan Healthcare Conference, Mr. Duggan delivered a presentation to conference attendees regarding the progress and prospects at Pharmacyclics. In the presentation, Mr. Duggan disclosed that for the fourth quarter of 2014, Pharmacyclics achieved

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preliminary results of approximately $185 million in U.S. net product revenue for IMBRUVICA® (ibrutinib), and that for 2015, Pharmacyclics anticipated U.S. net product revenue of approximately $1 billion for IMBRUVICA® (ibrutinib). The revenue forecast was based on the expectation that IMBRUVICA® (ibrutinib) would receive FDA approval for an additional indication in Waldenstroms macroglobulinemia, a type of non-Hodgkin lymphoma, in the near future and that Pharmacyclics expected very positive results from a front-line chronic lymphocytic leukemia trial to be announced in mid-2015. The positive prospects of Pharmacyclics were also bolstered by clinical successes involving the use of IMBRUVICA® (ibrutinib) in combination with other drugs in the field of hematology, as well as additional early pre-clinical results from the use of IMBRUVICA® (ibrutinib) in combination with multiple other novel therapies in the field of solid cancer tumors. Mr. Duggan finally reported that clinical data from patients taking IMBRUVICA® (ibrutinib) as a therapy for graft-versus-host-disease were uniformly positive and that such results validated the potential to explore the use of IMBRUVICA® (ibrutinib) across a variety of additional indications.

        On January 12, 2015 and January 14, 2015, Mr. Duggan, Ms. Zanganeh and Mr. Soni met with other senior executives from Party A regarding preliminary due diligence and employee retention matters related to a potential merger transaction.

        On January 12, 2015, J.P. Morgan first contacted AbbVie to solicit its interest in a potential merger with Pharmacyclics. Late that day, representatives of Centerview introduced Mr. Duggan and Ms. Zanganeh to a senior executive of Party B.

        On January 13, 2015, senior executives of Pharmacyclics and Party B met on two occasions. In the first meeting, attended by Mr. Duggan, Ms. Zanganeh and senior executives from Party B, the parties discussed the Pharmacyclics drug pipeline and potential collaboration opportunities. In the second meeting, attended by the individuals from the first meeting, and joined by a representative of Centerview and another senior executive from Party B, Mr. Duggan and Ms. Zanganeh provided an overview of Pharmacyclics and its current status and outlook. Representatives of Party B expressed strong interest in exploring a potential merger with Pharmacyclics.

        On January 15, 2015, representatives of Centerview contacted representatives of Party D to gauge Party D's interest in exploring a potential merger with Pharmacyclics.

        In mid-January through early February 2015, Pharmacyclics negotiated and executed nondisclosure agreements with each of AbbVie, Party A and Party B. Each of the nondisclosure agreements contained customary standstill provisions, which would automatically terminate upon the entry by Pharmacyclics into a definitive acquisition agreement with a third party.

        On January 20, 2015, representatives of Centerview spoke with representatives of Party C, who expressed uncertainty about exploring a potential merger with Pharmacyclics at such time. After this discussion, there was no further dialogue with representatives of Party C regarding a potential merger with Pharmacyclics.

        On January 20, 2015, representatives of Centerview also spoke with representatives of Party D, who said they were continuing to evaluate their level of interest in exploring a potential merger with Pharmacyclics.

        On January 27, 2015, following an introduction by J.P. Morgan, Mr. Duggan and Ms. Zanganeh met with Richard A. Gonzalez, the chief executive officer of AbbVie. Mr. Duggan and Ms. Zanganeh provided an overview of Pharmacyclics' business and operations, among other matters.

        On January 29, 2015, representatives of AbbVie contacted Ms. Zanganeh to confirm AbbVie's interest in engaging in further due diligence and discussions about a potential merger with Pharmacyclics.

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        On February 2, 2015, representatives of Centerview spoke with representatives of Party D, who expressed uncertainty about exploring a potential merger with Pharmacyclics at such time. After this discussion, there was no further dialogue with representatives of Party D regarding a potential merger with Pharmacyclics.

        The Pharmacyclics management team delivered a series of presentations providing a more detailed overview of various aspects of Pharmacyclics' business and operations in meetings with representatives of each of the three interested parties that occurred in the first half of February 2015, with Party A's management presentation occurring on February 4, 2015, AbbVie's management presentation occurring on February 9 and 10, 2015, and Party B's management presentation occurring on February 12 and 13, 2015. At each of the management presentations, the Pharmacyclics management team presented representatives of each of the three interested parties with information regarding the latest status of Pharmacyclics' clinical trials, as well as other operational, commercial, intellectual property, finance, legal and tax matters. The parties also had further discussions regarding employee retention matters. The initial feedback that the Pharmacyclics senior management team received from each of the three interested parties after the management presentations was very positive, and each of the three interested parties expressed strong interest in further exploring a potential merger with Pharmacyclics.

        On February 13, 2015, the Pharmacyclics board of directors met and received an update from the senior management team regarding the status of discussions with the parties that were contacted on behalf of Pharmacyclics to gauge their interest in exploring a potential merger with Pharmacyclics. The senior management team reported on the strong interest from AbbVie, Party A and Party B, as well as the status of due diligence. Representatives of Wilson Sonsini Goodrich & Rosati, Professional Corporation, referred to as "WSGR," legal counsel to Pharmacyclics, delivered a presentation on the Pharmacyclics board of directors' fiduciary duties in the context of a potential sale of Pharmacyclics. The Pharmacyclics board of directors then discussed the formal engagement of Centerview and J.P. Morgan. As part of this discussion, the Pharmacyclics board of directors considered various factors and criteria, including each bank's understanding of Pharmacyclics' business, each bank's leadership position in and understanding of the pharmaceutical industry, each bank's relationships with potential merger partners and other respective capabilities and strengths. After deliberation, including consideration of the proposed fee structures, the Pharmacyclics board of directors determined that having two financial advisors who had deep experience in the pharmaceuticals industry would be conducive to attaining the highest possible stockholder value, and resolved to retain formally both firms. The Pharmacyclics board of directors then discussed the preferred consideration for the potential merger, deliberating between proposing an all-cash transaction versus a transaction that would give stockholders the choice between the certainty of cash, and the potential upside and tax free treatment of receiving stock of the merger partner in exchange for their shares of Pharmacyclics common stock.

        On February 16, 2015, J.P. Morgan had its initial conversation with the financial advisor to Party A regarding the status of the solicitation process for the merger transaction.

        On February 17, 2015, Mr. Duggan and Ms. Zanganeh met with senior executives of Party A and discussed various aspects of a potential transaction.

        On February 18, 2015, Pharmacyclics released its fourth quarter 2014 and fiscal year 2014 financial results, announcing $492 million in net revenues from the sale of IMBRUVICA® (ibrutinib) in the United States in 2014, up from $14 million in fiscal year 2013.

        On February 19, 2015, Pharmacyclics signed engagement letters with Centerview and J.P. Morgan.

        On February 19, 2015, Mr. Duggan and Ms. Zanganeh met with a senior executive of Party B and discussed matters related to Pharmacyclics' clinical trials as well as employee retention matters.

        On February 20, 2015, the Pharmacyclics board of directors met and received an update from the senior management team and its advisors on the status of the ongoing discussions with each of the

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three interested parties. The senior management team reviewed with the Pharmacyclics board of directors its financial forecasts. Representatives of Centerview and J.P. Morgan presented to the Pharmacyclics board of directors their joint summary of the potential bid solicitation process and financial considerations relevant to a potential sale of Pharmacyclics. The Pharmacyclics board of directors discussed whether additional parties that might have an interest in merging with Pharmacyclics should be contacted, and after discussion, determined that a limited solicitation process involving only the most likely interested parties would best maximize stockholder value while minimizing the risk of leaks, management distraction and disclosure of competitively sensitive information. The Pharmacyclics board of directors further considered whether selling Pharmacyclics at the current time would be in the best interests of Pharmacyclics' stockholders, and discussed the potential implications to the business if Pharmacyclics progressed with its ongoing clinical trials and if such trials continued to deliver positive results. After deliberation, the Pharmacyclics board of directors decided that on a risk-adjusted basis, and in light of the favorable macroeconomic conditions in place at such time, a merger of Pharmacyclics with a third party at this time could deliver better value to the Pharmacyclics' stockholders than the value offered by continuing to execute Pharmacyclics' strategic plan, if Pharmacyclics were to achieve an attractive valuation in the current potential bid solicitation process. Finally, the Pharmacyclics board of directors discussed the desired structure for the transaction, and after deliberation, decided that the ideal transaction form would be a transaction that would give stockholders the choice between the certainty of value offered by cash, and the potential upside and tax free treatment of receiving stock of the merger partner in exchange for their shares of Pharmacyclics common stock.

        Also, on February 20, 2015, after conclusion of the Pharmacyclics board of directors meeting, Pharmacyclics' financial advisors, at the direction of the Pharmacyclics board of directors, delivered a letter to each of the three interested parties requesting the submission of a proposal to merge with Pharmacyclics by March 3, 2015. The letter stated that the Company's preference was to enter into a tax-free transaction for its stockholders that would allow its stockholders to participate in the continued success of IMBRUVICA® (ibrutinib) through a meaningful portion of stock in any merger.

        On or around February 23, 2015, each of the three interested parties received a draft merger agreement prepared by WSGR, which reflected a transaction structured as an exchange offer in which the Pharmacyclics stockholders would have the right to elect to receive cash, stock or a mix of cash and stock, with the exchange of stock intended to occur without triggering any U.S. federal income taxes. The number of shares of the merger partner's stock would be determined as a fixed value based on the trading price of the merger partner's stock at closing. The termination fee payable by Pharmacyclics in specified circumstances, including if the agreement was terminated in order to accept a superior proposal, would be 2% of the transaction value.

        In late February 2015, the Pharmacyclics management team hosted additional due diligence sessions with representatives of each of the three interested parties. The due diligence sessions covered a broad range of topics related to Pharmacyclics' business and operations, including drug pipeline, research and development, clinical programs, human resources, intellectual property, tax, finance and legal matters. Party B representatives attended sessions from February 21 through 24, 2015, Party A representatives attended sessions from February 23 through 24, 2015, and AbbVie representatives attended sessions from February 24 through 25, 2015.

        On February 23, 2015, Mr. Duggan, Ms. Zanganeh and Mr. Soni met with senior executives of Party A to discuss employee retention and other human resource matters and research & development matters.

        On February 25, 2015, Mr. Duggan and Ms. Zanganeh met again with Mr. Gonzalez of AbbVie to discuss the potential transaction, including AbbVie's potential growth and the potential post-closing integration of Pharmacyclics into AbbVie's operations.

        On February 25, 2015, Bloomberg issued a news report that Pharmacyclics was exploring options, including a sale of the company valuing Pharmacyclics between $17 billion to $18 billion. Pharmacyclics' share price rose from $188 per share to $220 per share, a 17% gain, on sharply increased trading volume.

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        On February 26 and 27, 2015, in light of the Bloomberg article, and at the direction of Pharmacyclics, Centerview and J.P. Morgan instructed each of the three interested parties that, although each of their proposals to merge with Pharmacyclics were still requested by March 3, 2015, each of them would be permitted to submit preliminary proposals, and were encouraged to submit their proposed revisions to the merger agreement, in advance of that date, with the goal of signing and announcing a transaction in the second half of the week of March 1, 2015.

        On February 27, 2015, the Pharmacyclics board of directors met and received an update on the status of the ongoing discussions with each of the three interested parties, including the proposed accelerated timeline for the bid solicitation process.

        On February 28, 2015, the legal counsel to Party B submitted a revised merger agreement to WSGR. Party B's revised merger agreement provided for an exchange offer to acquire Pharmacyclics, with total stock consideration not to exceed 40% of the total consideration and cash consideration not to exceed 60% of the total consideration. In addition, Party B proposed a termination fee equal to 3.5% of the transaction value.

        That same day, on behalf of AbbVie, Wachtell, Lipton, Rosen & Katz (referred to as "Wachtell Lipton"), legal counsel to AbbVie, submitted a revised merger agreement to WSGR. The revised merger agreement proposed an unspecified mix of cash and stock consideration, with the ability of Pharmacyclics stockholders to elect their preferred form of consideration, and a single-step merger structure. The structure included an unspecified collar around AbbVie's share price for purposes of calculating the stock consideration. In addition, AbbVie's revised merger agreement included a termination fee equal to 4% of the transaction value.

        For the next few days, negotiations were conducted with representatives of each party's respective legal counsel.

        On March 2, 2015, senior executives of Party A met with Mr. Duggan, Ms. Zanganeh and Mr. Soni and outlined the terms of a proposed transaction. Party A proposed that it would make an offer to acquire all of the outstanding shares of Pharmacyclics stock for cash and stock consideration valued at $225 per share. Party A's proposed transaction would allow Pharmacyclics' stockholders to elect to receive either cash or new equity interests in an acquisition vehicle that would own Pharmacyclics, with the equity interest being exchangeable in the future for Party A's stock, and not to exceed 20% of the total consideration and the exchange ratio being subject to a symmetrical 10% fixed value collar. The senior executives of Party A explained that the stock portion of the consideration was intended to be delivered on a tax-free basis. The Party A representatives also indicated that it could potentially offer a higher price in an all-cash transaction.

        On March 2, 2015, Mr. Duggan, Ms. Zanganeh and Mr. Soni met with senior executives of Party B, during which the senior executives of Party B outlined generally the value proposition offered by Party B, including making an offer to acquire all of the outstanding shares of Pharmacyclics stock for cash and stock consideration valued at $240 per share. Party B acknowledged that the merger agreement negotiations had been substantially completed, and agreed to provide Pharmacyclics' stockholders with a total mix of consideration of 57.5% cash and 42.5% stock. In addition, Party B agreed to a termination fee equal to 3% of the transaction value.

        Also on March 2, 2015, Mr. Duggan, Ms. Zanganeh and Mr. Soni met with Mr. Gonzalez, the chief executive officer of AbbVie, during which Mr. Gonzalez outlined generally the value proposition offered by AbbVie, including making an offer to acquire all of the outstanding shares of Pharmacyclics stock for cash and stock consideration valued at $250 per share, with $145 per share (equivalent to 58% of the total consideration) in cash and $105 per share (equivalent to 42% of the total consideration) in AbbVie common stock. The number of shares of AbbVie common stock would be determined on a fixed value with no collar around AbbVie's share price, and Pharmacyclics

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stockholders would have the right to elect all cash consideration or all stock consideration, subject to proration in the event of oversubscription.

        On the afternoon of March 2, 2015, Wachtell Lipton delivered a further revised merger agreement to WSGR, which now contemplated, among other things, an exchange offer structure with no collar around AbbVie's stock price and a proposed termination fee equal to 3.75% of the transaction value.

        Also on the afternoon of March 2, 2015, Party A's legal counsel delivered a revised merger agreement to WSGR. Party A's revised merger agreement proposed a cash-stock election, with the total stock consideration not to exceed 20% of the total consideration. The stock consideration would consist of new equity interests in the form of a preferred instrument in a new subsidiary of Party A that would own Pharmacyclics, with the equity interests being exchangeable for Party A's stock after a one-year holding period. The revised merger agreement proposed a one-step merger and a termination fee equal to 3% of the transaction value.

        On the evening of March 2, 2015, the Pharmacyclics board of directors met with senior management and Pharmacyclics' legal counsel to consider all three proposals. At the time of the meeting, AbbVie's offer included the highest per-share consideration; however, the Pharmacyclics board of directors took into consideration Party A's indication that it could potentially offer a higher price in an all-cash transaction. The Pharmacyclics board of directors considered the fact that removing the stock component would limit the flexibility of Pharmacyclics' stockholders to elect the form of consideration—including depriving Pharmacyclics' stockholders the opportunity to participate in any future upside in IMBRUVICA® (ibrutinib). After deliberation, the Pharmacyclics board of directors instructed Pharmacyclics' advisors to inform Party A that Pharmacyclics preferred a transaction on the terms outlined in the February 20, 2015 letter as opposed to an all-cash transaction.

        On the morning of March 3, 2015, the Pharmacyclics board of directors met and further discussed with senior management and Pharmacyclics' financial advisors and legal counsel various aspects of the three proposals and the approaches to drawing the bid solicitation process to a conclusion in a manner that would maximize stockholder value. After careful deliberation, the Pharmacyclics board of directors determined that reaching a final conclusion quickly was of paramount importance and would be most likely to maximize stockholder value, because it would motivate bidding parties to offer their maximum potential bid. Accordingly, the Pharmacyclics board of directors instructed Pharmacyclics' financial advisors and management to solicit "best and final" offers from the three interested parties. In addition, the Pharmacyclics board of directors discussed the terms of a proposed severance plan. The proposed severance plan contemplated severance in the amount of twelve months' base pay and bonuses, plus COBRA benefits, payable to individuals whose employment with Pharmacyclics terminated during the 24 months after a change in control transaction, with customary exceptions. In addition, the proposed severance plan contemplated payments to employees who would be subject to excise taxes under Section 280G of the Code as a result of the transaction, with the amount of such payments to be sufficient to eliminate the impact of such excise taxes on such individual's receipt of proceeds from the transaction.

        On March 3, 2015, Pharmacyclics' financial advisors delivered a letter to each of Party A, Party B and AbbVie. In the letter, each party was invited to conduct final due diligence after confirming that the merger agreement was in a form that the party would be prepared to execute. In addition, each party was requested to submit best and final offers on March 4, 2015, together with a final merger agreement and other related documents duly executed by such party.

        On the afternoon of March 3, 2015, the Pharmacyclics board of directors met and was provided with an update on the status of the negotiations with the three interested parties from the senior management team and representatives of WSGR.

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        On March 3 and 4, 2015, representatives of WSGR negotiated the terms of merger agreements with legal counsel for each of Party A, Party B and AbbVie.

        In the early afternoon of March 4, 2015, Pharmacyclics received best and final offers from each of the three bidders, together with a merger agreement duly executed by such bidder. Party B's best and final offer was valued at $250 per share, with 42.5% of the total consideration in the form of stock and 57.5% of the total consideration in the form of cash. Party A's best and final offer was an all-cash transaction at a purchase price of $250 per share. AbbVie's best and final offer was valued at $261.25 per share, with approximately 41.7% of the total consideration in the form of stock and 58.3% of the total consideration in the form of cash.

        On the afternoon of March 4, 2015, the Pharmacyclics board of directors convened to consider the best and final offers. Also participating were certain members of Pharmacyclics' management and representatives of Centerview, J.P. Morgan and WSGR. Representatives of WSGR reviewed with the Pharmacyclics board of directors its fiduciary duties in considering a merger of Pharmacyclics with a third party. Representatives of Centerview and J.P. Morgan began by reviewing the proposals received by each of the three parties, explaining that each bidder had been instructed to make a "best and final" offer, which would not be subject to further negotiations or counteroffers. The Pharmacyclics board of directors reviewed the proposals, including a summary of each of the proposed merger agreements. After discussion, the Pharmacyclics board of directors concluded that AbbVie's proposal, together with the terms of the proposed merger agreement with AbbVie, represented a transaction that was superior to the proposals submitted by Party A and Party B and that entry into a transaction with AbbVie on such terms was in the best interests of Pharmacyclics stockholders.

        Representatives of WSGR then provided a detailed review of the terms of the proposed merger agreement with AbbVie. Representatives of Centerview and J.P. Morgan reviewed with the Pharmacyclics board of directors the terms of the proposed transaction from a financial point of view. Following this presentation, representatives of Centerview and J.P. Morgan delivered to the Pharmacyclics board of directors their respective oral opinions, subsequently confirmed in writing, that, as of the date of March 4, 2015 and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken in preparing their respective written opinions, the aggregate merger consideration to be paid to the holders of Pharmacyclics shares (other than certain Pharmacyclics shares specified in the respective opinions) was fair, from a financial point of view, to such holders. For more information about Centerview's and J.P. Morgan's respective opinions, see below under the headings "—Opinion of Centerview Partners LLC" and "—Opinion of J.P. Morgan Securities LLC." After discussing potential reasons for and against the proposed transaction (see below under the heading "—Pharmacyclics' Reasons for the Offer and the Merger"), the Pharmacyclics board of directors unanimously determined that the offer and the merger and the other transactions contemplated by the merger agreement were at a price and on terms that were fair to, advisable and in the best interests of Pharmacyclics and its stockholders, approved the offer, the merger and merger agreement and recommended that Pharmacyclics' stockholders tender their shares in the offer. The Pharmacyclics board of directors also adopted a resolution authorizing amendments to Pharmacyclics' bylaws to provide that courts in Santa Clara County, California would be the exclusive forum for derivative claims brought on behalf of Pharmacyclics, claims asserting breaches of fiduciary duties or arising from the DGCL or Pharmacyclics' charter or bylaws, and certain other types of claims. The Pharmacyclics board of directors also approved the proposed severance plan for employees of the Pharmacyclics described above.

        On March 4, 2015, following the Pharmacyclics board of directors meeting, Pharmacyclics and AbbVie finalized the merger agreement and related schedules and agreements and executed the merger agreement and related agreements in connection with the transaction.

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        Following the close of markets in the United States on March 4, 2015, AbbVie and Pharmacyclics jointly announced the transaction.

Pharmacyclics' Reasons for the Offer and the Merger

        In evaluating the merger agreement and the transactions contemplated by the merger agreement, including the offer and the merger, the Pharmacyclics board of directors consulted with Pharmacyclics' senior management, as well as Centerview and J.P. Morgan. In the course of reaching its determination that the offer and the merger are in the best interests of Pharmacyclics stockholders, and its recommendation that Pharmacyclics stockholders accept the offer and tender their Pharmacyclics shares into the offer, the Pharmacyclics board of directors considered numerous factors, including the following material factors and benefits of the offer and the merger, each of which the Pharmacyclics board of directors believed supported its unanimous determination and recommendation:

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        In reaching its determinations and recommendations described above, the Pharmacyclics board of directors also considered the following potentially negative factors:

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        The foregoing discussion of the factors considered by the Pharmacyclics board of directors is intended to be a summary, and is not intended to be exhaustive, but rather includes the material factors considered by the Pharmacyclics board of directors. After considering these factors, the Pharmacyclics board of directors concluded that the positive factors relating to the merger agreement and the transactions contemplated by the merger agreement, including the offer and the merger, substantially outweighed the potential negative factors. The Pharmacyclics board of directors collectively reached the conclusion to approve the merger agreement and the related transactions, including the offer and the merger, in light of the various factors described above and other factors that the members of the Pharmacyclics board of directors believed were appropriate. In view of the wide variety of factors considered by the Pharmacyclics board of directors in connection with its evaluation of the merger agreement and the transactions contemplated by the merger agreement, including the offer and the merger, and the complexity of these matters, the Pharmacyclics board of directors did not consider it practical, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision, and it did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. Rather, the Pharmacyclics board of directors made its recommendation based on the totality of information it received and the investigation it conducted. In considering the factors discussed above, individual directors may have given different weights to different factors.

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AbbVie's Reasons for the Offer and the Merger

        In reaching its decision to approve the offer, the merger, the merger agreement and the other transactions contemplated by the merger agreement, AbbVie's board of directors consulted with AbbVie's senior management team, as well as AbbVie's outside advisors, and considered a number of factors, including the following material factors which it viewed as supporting its decision to approve the offer, the merger, the merger agreement and the other transactions contemplated by the merger agreement:

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        The AbbVie board of directors also considered a variety of uncertainties and risks and other potentially negative factors concerning the merger agreement and the acquisition, including the following (not in any relative order of importance):

        The AbbVie board of directors concluded that the potential negative factors associated with the acquisition were outweighed by the potential benefits that it expected AbbVie and its stockholders to achieve as a result of the offer and the merger. Accordingly, the AbbVie board of directors approved the merger agreement, the offer, the merger and the other transactions contemplated by the merger agreement.

        The foregoing discussion of the information and factors considered by the AbbVie board of directors is not intended to be exhaustive, but includes the material factors considered by the AbbVie board of directors. In view of the variety of factors considered in connection with its evaluation of the acquisition, the AbbVie board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination. In

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addition, individual directors may have given different weights to different factors. The AbbVie board of directors did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The AbbVie board of directors based its determination on the totality of the information presented.

Opinion of Pharmacyclics' Financial Advisors

        Pharmacyclics retained Centerview as financial advisor to the Pharmacyclics board of directors in connection with the proposed offer and merger and the other transactions contemplated by the merger agreement, which are collectively referred to as the "offer and the merger" throughout this section. In connection with this engagement, the Pharmacyclics board of directors requested that Centerview evaluate the fairness, from a financial point of view, to the holders of Pharmacyclics shares (other than Pharmacyclics shares to be cancelled in connection with the merger, Pharmacyclics shares held by stockholders who have properly exercised and perfected dissenters' rights under the DGCL and any Pharmacyclics shares held by any affiliate of AbbVie, which are collectively referred to as "excluded shares" throughout this section) of the aggregate mixed consideration together with the aggregate all-cash consideration and the aggregate all-stock consideration proposed to be paid to such holders, taken together (and not separately), which is referred to as "merger consideration" throughout this section, pursuant to the merger agreement.

        On March 4, 2015, Centerview rendered to the Pharmacyclics board of directors its oral opinion, which was subsequently confirmed by delivery of a written opinion dated as of such date, to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations described in its written opinion, the merger consideration proposed to be paid to the holders of Pharmacyclics shares (other than excluded shares) pursuant to the merger agreement was fair, from a financial point of view, to such holders.

        The full text of Centerview's written opinion, dated March 4, 2015, which describes the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, is attached as Annex B to this document and is incorporated herein by reference. Centerview's financial advisory services and opinion were provided for the information and assistance of the members of the Pharmacyclics board of directors (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the offer and the merger and Centerview's opinion addressed only the fairness, from a financial point of view, as of the date thereof, to the holders of Pharmacyclics shares (other than excluded shares) of the merger consideration to be paid to such holders pursuant to the merger agreement. Centerview's opinion did not address any other term or aspect of the merger agreement or the offer and the merger and does not constitute a recommendation to any stockholder of Pharmacyclics as to whether or not such holder should tender Pharmacyclics shares in connection with the offer, or how such stockholder or other person should otherwise act with respect to the offer and the merger or any other matter, including, without limitation, whether such stockholder should elect to receive the all-cash consideration, the all-stock consideration or the mixed consideration, or make no election, in the offer and the merger.

        The full text of Centerview's written opinion should be read carefully in its entirety for a description of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion. The summary of the written opinion of Centerview set forth below is qualified in its entirety by the full text of Centerview's written opinion attached as Annex B.

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        In connection with rendering the opinion described above and performing its related financial analyses, Centerview reviewed, among other things:

        Centerview also conducted discussions with members of the senior management and representatives of Pharmacyclics regarding their assessment of Pharmacyclics internal data and the strategic rationale for the offer and the merger, and with members of the senior management and representatives of AbbVie regarding the AbbVie data. In addition, Centerview reviewed publicly available financial and stock market data, including valuation multiples, for Pharmacyclics and compared that data with similar data for certain other companies, the securities of which are publicly traded, in lines of business that Centerview deemed relevant. Centerview also compared certain of the proposed financial terms of the offer and the merger with the financial terms, to the extent publicly available, of certain other transactions that Centerview deemed relevant and conducted such other financial studies and analyses and took into account such other information as Centerview deemed appropriate.

        Centerview assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by Centerview for purposes of its opinion and, with Pharmacyclics' consent, Centerview relied upon such information as being complete and accurate. In that regard, Centerview assumed, at Pharmacyclics' direction, that Pharmacyclics internal data (including, without limitation, the Pharmacyclics forecasts) were reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Pharmacyclics as to the matters covered thereby, and Centerview relied, at Pharmacyclics' direction, on Pharmacyclics internal data for purposes of Centerview's analysis and opinion. Centerview expressed no view or opinion as to Pharmacyclics internal data or the assumptions on which it was based. In addition, at Pharmacyclics' direction, Centerview did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of Pharmacyclics or AbbVie, nor was Centerview furnished with any such evaluation or appraisal, and Centerview was not asked to conduct, and did not

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conduct, a physical inspection of the properties or assets of Pharmacyclics or AbbVie. Centerview assumed, at Pharmacyclics' direction, that the final executed merger agreement would not differ in any respect material to Centerview's analysis or opinion from the draft merger agreement reviewed by Centerview. Centerview also assumed, at Pharmacyclics' direction, that the offer and the merger will be consummated on the terms set forth in the merger agreement and in accordance with all applicable laws and other relevant documents or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to Centerview's analysis or Centerview's opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the offer and the merger, no delay, limitation, restriction, condition or other change, including any divestiture requirements or amendments or modifications will be imposed, the effect of which would be material to Centerview's analysis or Centerview's opinion. Centerview further assumed, at Pharmacyclics' direction, that the offer and the merger will qualify for U.S. federal income tax purposes as a "reorganization" within the meaning of Section 368(a) of the Code, without adjustment to the relative mix of cash consideration and stock consideration. Centerview did not evaluate and did not express any opinion as to the solvency or fair value of Pharmacyclics or AbbVie, or the ability of Pharmacyclics or AbbVie to pay their respective obligations when they come due, or as to the impact of the offer and the merger on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Centerview is not a legal, regulatory, tax or accounting advisor, and Centerview expressed no opinion as to any legal, regulatory, tax or accounting matters.

        Centerview's opinion expressed no view as to, and did not address, Pharmacyclics' underlying business decision to proceed with or effect the offer and the merger, or the relative merits of the offer and the merger as compared to any alternative business strategies or transactions that might be available to Pharmacyclics or in which Pharmacyclics might engage. Centerview's opinion was limited to and addressed only the fairness, from a financial point of view, as of the date of Centerview's written opinion, to the holders of the Pharmacyclics shares (other than excluded shares) of the merger consideration to be paid to such holders pursuant to the merger agreement. For purposes of its opinion, Centerview was not asked to, and Centerview did not, express any view on, and its opinion did not address, any other term or aspect of the merger agreement or the offer and the merger, including, without limitation, the structure or form of the offer and the merger, or any other agreements or arrangements contemplated by the merger agreement (including the support agreement) or entered into in connection with or otherwise contemplated by the offer and the merger, including, without limitation, (a) the fairness of the offer and the merger or any other term or aspect of the offer and the merger to, or any consideration to be received in connection therewith by, or the impact of the offer and the merger on, the holders of any other class of securities, creditors or other constituencies of Pharmacyclics or any other party, (b) the allocation of the merger consideration as among holders of Pharmacyclics shares who receive the all-cash consideration, the all-stock consideration or the mixed consideration, or (c) the relative fairness of the all-cash consideration, the all-stock consideration and the mixed consideration. In addition, Centerview expressed no view or opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of Pharmacyclics or any party, or class of such persons in connection with the offer and the merger, whether relative to the merger consideration to be paid to the holders of the Pharmacyclics shares (other than excluded shares) pursuant to the merger agreement or otherwise. Centerview's opinion was necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to Centerview as of, the date of Centerview's written opinion, and Centerview does not have any obligation or responsibility to update, revise or reaffirm its opinion based on circumstances, developments or events occurring after the date of Centerview's written opinion. Centerview expressed no view or opinion as to what the value of AbbVie common stock actually will be when issued pursuant to the offer and the merger or the prices at which Pharmacyclics shares or AbbVie common stock will

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trade or otherwise be transferable at any time, including following the announcement or consummation of the offer and the merger. Centerview's opinion does not constitute a recommendation to any stockholder of Pharmacyclics as to whether or not such holder should tender Pharmacyclics shares in connection with the offer, or how such stockholder or other person should otherwise act with respect to the offer and the merger or any other matter, including, without limitation, whether such stockholder should elect to receive the all-cash consideration, the all-stock consideration or the mixed consideration, or make no election, in the offer and the merger. Centerview's financial advisory services and its written opinion were provided for the information and assistance of the members of the Pharmacyclics board of directors (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the offer and the merger. The issuance of Centerview's opinion was approved by the Centerview Partners LLC Fairness Opinion Committee.

        The following is a summary of the material financial analyses prepared and reviewed with the Pharmacyclics board of directors in connection with Centerview's opinion, dated March 4, 2015. The summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by, and underlying the opinion of, Centerview, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by Centerview. Centerview may have deemed various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion of the analyses summarized below should not be taken to be Centerview's view of the actual value of Pharmacyclics. Some of the summaries of the financial analyses set forth below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses performed by Centerview. Considering the data in the tables below without considering all financial analyses or factors or the full narrative description of such analyses or factors, including the methodologies and assumptions underlying such analyses or factors, could create a misleading or incomplete view of the processes underlying Centerview's financial analyses and its opinion. In performing its analyses, Centerview made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of Pharmacyclics or any other parties to the offer and the merger. None of Pharmacyclics, AbbVie, Offeror, Merger Sub 2 or Centerview or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of Pharmacyclics do not purport to be appraisals or reflect the prices at which Pharmacyclics may actually be sold. Accordingly, the assumptions and estimates used in, and the results derived from, the financial analyses are inherently subject to substantial uncertainty. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before March 3, 2015 (the last trading day before the public announcement of the offer and the merger) and is not necessarily indicative of current market conditions. The implied per share equity value ranges described below were based on Pharmacyclics' fully diluted outstanding Pharmacyclics shares calculated on a treasury stock method basis (taking into account outstanding in-the-money options, restricted stock units, or RSUs, and other equity awards and convertible securities) based on information provided by Pharmacyclics.

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        Centerview reviewed and compared certain financial information of Pharmacyclics to corresponding financial information of the following publicly traded companies that Centerview deemed comparable, based on its experience and professional judgment, to Pharmacyclics:

        Although none of the selected companies is directly comparable to Pharmacyclics, the companies listed above were chosen by Centerview, among other reasons, because they are publicly traded biopharmaceutical companies with certain operational, business and/or financial characteristics that, for purposes of Centerview's analysis, may be considered similar to those of Pharmacyclics.

        Centerview calculated and compared financial multiples for the selected comparable companies based on publicly available information it obtained from SEC filings, FactSet (a data source containing historical and estimated financial data) and other Wall Street research, and closing stock prices on March 3, 2015 (the last full trading day prior to the delivery by Centerview of its opinion to the Pharmacyclics board of directors). With respect to each of the selected comparable companies, Centerview calculated enterprise value (calculated as the equity value (taking into account outstanding in-the-money options, restricted stock units, or RSUs, and other equity awards and convertible securities) plus the book value of debt less cash equivalents) as a multiple of the consensus estimated or Wall Street research analyst estimated revenues for calendar years 2016 and 2017 and earnings per share, or EPS (a ratio commonly referred to as price to earnings ratio, or P/E), for calendar year 2017, as set forth below.

 
  Revenue Multiple   EPS Multiple  
Company
  2016E   2017E   2017E  

Alexion Pharmaceuticals, Inc.

    11.1x     9.2x     20.8x  

Vertex Pharmaceuticals Incorporated

    10.5x     7.5x     17.6x  

BioMarin Pharmaceutical Inc.

    16.4x     12.6x     NM  

Incyte Corporation

    17.8x     14.3x     39.6x  

UCB S.A.

    4.0x     3.7x     18.8x  

Actelion Ltd.

    6.5x     5.8x     17.9x  

Jazz Pharmaceuticals Public Limited Company

    7.4x     6.5x     12.6x  

Medivation, Inc.

    9.4x     7.5x     20.5x  

United Therapeutics Corporation

    4.3x     4.1x     12.3x  

Seattle Genetics, Inc.

    10.7x     8.6x     NM  

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        Companies that had a revenue multiple greater than 30.0x or an earnings per share multiple greater than 50.0x were excluded from the summary statistics above as outliers (which are indicated above as "NM").

        The results of this analysis are summarized as follows:

 
  Revenue
Multiple
  EPS Multiple  
 
  2016E   2017E   2017E  

75th Percentile

    11.0x     9.1x     20.6x  

Median

    10.0x     7.5x     18.3x  

25th Percentile

    6.7x     6.0x     16.3x  

        Based on the foregoing, Centerview applied a valuation range of (i) 6.7x to 11.0x, representing the 25th and 75th percentiles, respectively, of estimated 2016 revenue multiples derived from the selected comparable companies, to Pharmacyclics' estimated calendar year 2016 revenue based on 50% of worldwide IMBRUVICA® (ibrutinib) product revenue of $1.355 billion, as set forth in the Pharmacyclics forecasts, which resulted in an implied per share equity value range for the Pharmacyclics shares of approximately $125.10 to $196.70; (ii) 6.0x to 9.1x, representing the 25th and 75th percentiles, respectively, of estimated 2017 revenue multiples derived from the selected comparable companies, to Pharmacyclics' estimated calendar year 2017 revenue based on 50% of worldwide IMBRUVICA® (ibrutinib) product revenue of $1.888 billion, as set forth in the Pharmacyclics forecasts, which resulted in an implied per share equity value range for the Pharmacyclics shares of approximately $152.80 to $224.70; and (iii) 16.3x to 20.6x, representing the 25th and 75th percentiles, respectively, of estimated 2017 EPS multiples derived from the selected comparable companies, to Pharmacyclics' estimated calendar year 2017 EPS of $11.25 per share, as set forth in the Pharmacyclics forecasts, which resulted in an implied per share equity value range for the Pharmacyclics shares of approximately $183.30 to $231.70. Centerview compared these ranges to the per share equity value of the merger consideration of $261.25.

        Centerview reviewed and analyzed certain information relating to selected transactions involving biopharmaceutical companies that Centerview, based on its experience and judgment as a financial advisor, deemed relevant to consider in relation to Pharmacyclics and the offer and the merger.

        Using publicly available information, Centerview calculated, for each selected transaction, the enterprise value (calculated as the equity value (taking into account outstanding in-the-money options, RSU, and other equity awards and convertible securities) plus the book value of debt less cash equivalents) implied for each target company based on the consideration payable in the applicable

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selected transaction as a multiple of the target company's next-twelve months, or NTM, estimated revenues, at the time of the transaction announcement, as reflected below.

Date Announced
  Target   Acquiror   Trans Val/
NTM Rev
 

December 8, 2014

  Cubist Pharmaceuticals, Inc.   Merck & Co., Inc.     6.8x  

August 24, 2014*

  InterMune, Inc.   Roche Holding Ltd     29.6x  

December 19, 2013*

  Algeta ASA   Bayer AG     22.2x  

August 25, 2013*

  Onyx Pharmaceuticals, Inc.   Amgen Inc.     13.0x  

June 29, 2012*

  Amylin Pharmaceuticals, Inc.   Bristol-Myers Squibb Company     8.6x  

November 21, 2011

  Pharmasset, Inc.   Gilead Sciences, Inc.     NM  

February 16, 2011*

  Genzyme Corporation   Sanofi-Aventis     4.0x  

June 30, 2010*

  Abraxis BioScience, Inc.   Celgene Corporation     6.8x  

May 16, 2010*

  OSI Pharmaceuticals, Inc.   Astellas Pharma Inc.     6.2x  

October 6, 2008*

  ImClone Systems Incorporated   Eli Lilly and Company     7.8x  

April 10, 2008

  Millennium Pharmaceuticals, Inc.   Takeda Pharmaceutical Company Limited     13.5x  

December 10, 2007

  MGI Pharma, Inc.   Eisai Co., Ltd.     7.3x  

November 18, 2007

  Pharmion Corporation   Celgene Corporation     7.0x  

April 23, 2007*

  MedImmune, Inc.   AstraZeneca PLC     9.8x  

*
Indicates transactions with public pre-announcement transaction rumors. Premiums summarized above are based on pre-rumor prices.

        Transactions having a multiple greater than 30.0x were excluded from the summary statistics above as outliers (which are indicated above as "NM").

        No company or transaction used in this analysis is identical or directly comparable to Pharmacyclics or the offer and the merger. The companies included in the selected transactions above were selected, among other reasons, because they have certain characteristics that, for the purposes of this analysis, may be considered similar to certain characteristics of Pharmacyclics. The reasons for and the circumstances surrounding each of the selected precedent transactions analyzed were diverse and there are inherent differences in the business, operations, financial conditions and prospects of Pharmacyclics and the companies included in the selected precedent transactions analysis. This analysis involves complex considerations and qualitative judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the selected target companies and Pharmacyclics.

        Financial data for the precedent transactions was based on publicly available information at the time of the announcement of the relevant transactions that Centerview obtained from SEC filings, relevant press releases, FactSet, Bloomberg and Wall Street research.

        The results of this analysis are summarized as follows:

 
  Trans. Value/
NTM Revenues
 

75th Percentile

    13.0x  

Median

    7.8x  

25th Percentile

    6.8x  

        Based on the foregoing analysis and other considerations that Centerview deemed relevant in its professional judgment and expertise, Centerview applied an illustrative range of NTM revenues multiples of 6.8x to 13.0x, respectively, of estimated NTM revenue multiples derived from the precedent transactions, to Pharmacyclics' estimated NTM revenue based on estimated 50% of worldwide IMBRUVICA® (ibrutinib) product revenue (calculated as 75% of 2015 IMBRUVICA® (ibrutinib) product revenue plus 25% of 2016 IMBRUVICA® (ibrutinib) product revenue) of $906 million, as set forth in the Pharmacyclics forecasts, which resulted in an implied per share equity

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value range for the Pharmacyclics shares of approximately $89.20 to $158.30. Centerview compared this range to the per share equity value of the merger consideration of $261.25.

        Centerview performed a discounted cash flow analysis of Pharmacyclics based on the Pharmacyclics forecasts. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset by calculating the "present value" of estimated future cash flows of the asset. "Present value" refers to the current value of future cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors. Centerview calculated a range of illustrative enterprise values for Pharmacyclics by (a) discounting to present value as of March 31, 2015, using discount rates ranging from 9% to 11% (reflecting Centerview's analysis of Pharmacyclics' weighted average cost of capital, derived using the Capital Asset Pricing Model, taking into account certain metrics that Centerview deemed relevant in its professional judgment and experience, including target capital structure, levered and unlevered betas for the companies listed in the Selected Comparable Public Company Analysis described above, tax rates, the market risk and size premia and yields for U.S. treasury notes), using the mid-year convention: (i) the forecasted fully-taxed unlevered free cash flows of Pharmacyclics during the period beginning on April 1, 2015 and ending on December 31, 2028 calculated based on the Pharmacyclics forecasts (excluding expenditures for non-IMBRUVICA® (ibrutinib) pipeline programs) and (ii) a range of illustrative terminal values of Pharmacyclics as of December 31, 2028 calculated by Centerview applying to Pharmacyclics' fully-taxed unlevered free cash flows for the terminal year perpetuity growth decline ranging from 70% to 90% for fully-taxed unlevered free cash flows in the U.S. and decline ranging from 30% to 70% for fully-taxed unlevered free cash flows outside of the United States, respectively (in each case to account for the fact that the expiry of Pharmacyclics' patents would lead to increased competition from generics according to Pharmacyclics management), and (b) adding to the foregoing results (i) $750 million, representing the estimated value of Pharmacyclics' non-IMBRUVICA® (ibrutinib) pipeline programs, calculated based on guidance from Pharmacyclics' management and the approximate median enterprise value of select publicly-traded development-stage biopharmaceutical companies (based on information Centerview obtained from SEC filings, FactSet Research Systems and other Wall Street research):


Selected Publicly-Traded Development-State Biopharmaceutical Companies

 
  Firm Value  
 
  (in millions)
 

Merrimack Pharmaceuticals, Inc.

  $ 1,566  

Acceleron Pharma, Inc.

  $ 1,271  

Array BioPharma Inc.

  $ 1,145  

MacroGenics, Inc.

  $ 813  

Alder Biopharmaceuticals, Inc.

  $ 792  

Karyopharm Therapeutics, Inc.

  $ 684  

Epizyme, Inc.

  $ 636  

OncoMed Pharmaceuticals, Inc.

  $ 600  

Galápagos NV

  $ 462  

Five Prime Therapeutics, Inc.

  $ 448  

and (ii) Pharmacyclics' estimated net cash balance of $850 million as of March 31, 2015, as provided by management of Pharmacyclics. Centerview treated stock-based compensation as a non-cash expense for the purposes of this analysis. Centerview divided the result of the foregoing calculations by Pharmacyclics' fully diluted outstanding Pharmacyclics shares, calculated as described above, to derive an implied per share equity value range of approximately $195.00 to $223.00 per share. Centerview compared this range to the per share equity value of the merger consideration of $261.25.

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        Centerview noted for the Pharmacyclics board of directors certain additional factors solely for informational purposes, including, among other things, the following:

        The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. In arriving at its opinion, Centerview did not draw, in isolation, conclusions from or with regard to any factor or analysis that it considered. Rather, Centerview made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of the analyses.

        Centerview's financial analyses and opinion were only one of many factors taken into consideration by the Pharmacyclics board of directors in its evaluation of the offer and the merger. Consequently, the analyses described above should not be viewed as determinative of the views of the board of directors or management of Pharmacyclics with respect to the merger consideration or as to whether the Pharmacyclics board of directors would have been willing to determine that a different consideration was fair. The consideration for the transaction was determined through arm's-length negotiations between Pharmacyclics and AbbVie and was approved by the Pharmacyclics board of directors. Centerview provided advice to Pharmacyclics during these negotiations. Centerview did not, however recommend any specific amount of consideration to Pharmacyclics or its board of directors or that any specific amount of consideration constituted the only appropriate consideration for the transaction.

        Centerview is a securities firm engaged directly and through affiliates and related persons in a number of investment banking, financial advisory and merchant banking activities. In the past two years, Centerview has not provided any financial advisory or other services to Pharmacyclics or AbbVie for which it has received any compensation. Centerview may provide investment banking and other services to or with respect to Pharmacyclics or AbbVie or their respective affiliates in the future, for which Centerview may receive compensation. Certain (i) of Centerview and its affiliates' directors, officers, members and employees, or family members of such persons, (ii) of Centerview's affiliates or related investment funds and (iii) investment funds or other persons in which any of the foregoing may have financial interests or with which they may co-invest, may at any time acquire, hold, sell or trade, in debt, equity and other securities or financial instruments (including derivatives, bank loans or other obligations) of, or investments in, Pharmacyclics, AbbVie or any of their respective affiliates, or any other party that may be involved in the offer and the merger.

        The Pharmacyclics board of directors selected Centerview as its financial advisor in connection with the offer and the merger based on various factors and criteria, including Centerview's understanding of Pharmacyclics' business, Centerview's leadership position in and understanding of the pharmaceutical industry, Centerview's relationships with potential merger partners and other

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capabilities and strengths. Centerview is an internationally recognized investment banking firm that has substantial experience in transactions similar to the offer and the merger.

        In connection with Centerview's services as the financial advisor to the Pharmacyclics board of directors, Pharmacyclics has agreed to pay Centerview an aggregate fee of approximately $40.8 million, $1.5 million of which was payable upon the rendering of Centerview's opinion and approximately $39.3 million of which is payable contingent upon consummation of the offer and the merger. In addition, Pharmacyclics has agreed to reimburse certain of Centerview's expenses arising, and to indemnify Centerview against certain liabilities that may arise, out of Centerview's engagement.

        Pursuant to an engagement letter dated February 18, 2015, Pharmacyclics retained J.P. Morgan as its financial advisor in connection with the offer and the first merger (which we refer to collectively in this section as the "offer and the merger").

        At the meeting of the Pharmacyclics board of directors on March 4, 2015, J.P. Morgan rendered its oral opinion to the Pharmacyclics board of directors that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the consideration to be paid to the holders of Pharmacyclics shares in the offer and the merger was fair, from a financial point of view, to such stockholders. J.P. Morgan confirmed its March 4, 2015 oral opinion by delivering its written opinion to the Pharmacyclics board of directors, dated March 4, 2015, that, as of such date, the consideration to be paid to the holders of Pharmacyclics shares in the offer and the merger was fair, from a financial point of view, to such stockholders. No limitations were imposed by Pharmacyclics' board of directors upon J.P. Morgan with respect to the investigations made or procedures followed by it in rendering its opinions.

        The full text of the written opinion of J.P. Morgan dated March 4, 2015, which sets forth the assumptions made, matters considered and limits on the review undertaken, is attached as Annex C to this document and is incorporated herein by reference. Holders of Pharmacyclics shares are urged to read the opinion in its entirety. J.P. Morgan's written opinion is addressed to the Pharmacyclics board of directors (in its capacity as such), is directed only to the consideration to be paid in the offer and the merger and does not constitute a recommendation to any holder of Pharmacyclics shares as to whether such stockholder should tender its shares in the offer and the merger, or how such stockholder should vote with respect to the offer and the merger or any other matter, including, without limitation, whether any stockholder should elect to receive the all-cash consideration, the all-stock consideration or the mixed consideration or make no election in the offer and the merger. The summary of the opinion of J.P. Morgan set forth in this document is qualified in its entirety by reference to the full text of such opinion.

        In arriving at its opinions, J.P. Morgan, among other things:

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        J.P. Morgan also held discussions with certain members of the management of Pharmacyclics and AbbVie with respect to certain aspects of the offer and the merger, and the past and current business operations of Pharmacyclics and AbbVie, the financial condition and future prospects and operations of Pharmacyclics and AbbVie, the effects of the offer and the merger on the financial condition and future prospects of Pharmacyclics and AbbVie, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

        J.P. Morgan relied upon and assumed, without assuming responsibility or liability for independent verification, the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by Pharmacyclics and AbbVie or otherwise reviewed by or for J.P. Morgan. J.P. Morgan did not conduct or was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of Pharmacyclics, AbbVie, the Offeror or Merger Sub 2 under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to it, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of Pharmacyclics and AbbVie to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts or the assumptions on which they were based. J.P. Morgan also assumed that the offer and the merger will qualify as a tax-free reorganization for United States federal income tax purposes and will be consummated as described in the merger agreement and this document, and that the other transactions contemplated by the merger agreement will be consummated as described in the merger agreement and this document, and that the definitive merger agreement would not differ in any material respect from the draft thereof provided to J.P. Morgan. J.P. Morgan relied as to all legal matters relevant to the rendering of its opinion upon the advice of counsel. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the offer and the merger will be obtained without any adverse effect on Pharmacyclics, AbbVie, the Offeror or Merger Sub 2 or on the contemplated benefits of the offer and the merger.

        The projections furnished to J.P. Morgan for Pharmacyclics were prepared by the management of Pharmacyclics. Pharmacyclics does not publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan's analysis of the offer and the merger, and such projections were not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of management, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those set forth in such projections.

        J.P. Morgan's opinion is based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of the date of such opinion. Subsequent developments may affect J.P. Morgan's written opinion dated March 4, 2015, and J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion. J.P. Morgan's opinion is limited to the fairness, from a financial point of view, of the consideration to be paid to holders of Pharmacyclics shares in the merger, and J.P. Morgan has expressed no opinion as to the fairness of the offer and the merger to, or any consideration of, the holders of any other class of securities, creditors or other constituencies of Pharmacyclics or the underlying decision by Pharmacyclics to engage in the offer and the merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any

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compensation to any officers, directors, or employees of any party to the offer and the merger, or any class of such persons relative to the consideration to be paid to the holders of Pharmacyclics shares in the merger or with respect to the fairness of any such compensation. J.P. Morgan expressed no opinion as to the price at which Pharmacyclics shares or shares of AbbVie common stock will trade at any future time, whether before or after the closing of the offer and the merger.

        In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methods in reaching its opinion. The following is a summary of the material financial analyses utilized by J.P. Morgan in connection with providing its opinion.

        For each of the analyses performed by J.P. Morgan, J.P. Morgan utilized the treasury stock method to calculate fully diluted shares outstanding and options and restricted stock units provided by the management of Pharmacyclics.

        Using publicly available information, J.P. Morgan compared selected financial data of Pharmacyclics with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be analogous to Pharmacyclics. The companies selected by J.P. Morgan were as follows:

        These companies were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan's analyses, were, in J.P. Morgan's judgment, considered sufficiently similar to that of Pharmacyclics based on business sector participation, financial metrics and form of operations. None of the selected companies reviewed is identical to Pharmacyclics and certain of these companies may have characteristics that are materially different from that of Pharmacyclics. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies differently than would affect Pharmacyclics.

        For each of the selected companies, multiples were based on closing stock prices on March 3, 2015 (the last full trading day prior to the delivery by J.P. Morgan of its opinion to the Pharmacyclics board of directors). For each of the following analyses performed by J.P. Morgan, estimated financial data for the selected companies were based on information J.P. Morgan obtained from SEC filings, FactSet Research Systems and other Wall Street research. The multiples and ratios for each of the selected companies were based on such information. Among other calculations, with respect to Pharmacyclics and the selected companies, J.P. Morgan calculated (1) the multiple of firm value (calculated as the market value of equity on a fully-diluted basis, taking into account in-the-money options, restricted stock units and other equity awards and, convertible securities, plus the book value of debt and other adjustments, including preferred equity and minority interest, net of equity in affiliates and cash and cash equivalents) to estimated revenue for calendar years 2016 and 2017 (which we refer to in this section as "FV / Revenue"), and (2) the multiple of share price to estimated earnings per share, or EPS for calendar year 2017 (which we refer to in this section as "P/E 2017E").

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        Results of the analysis were presented for Pharmacyclics and the selected companies, as indicated in the following table:

 
  FV / Revenue   P/E  
 
  2016E   2017E   2017E  

Alexion Pharmaceuticals, Inc.

    11.1x     9.2x     20.8x  

Vertex Pharmaceuticals Incorporated

    10.6x     7.5x     17.6x  

BioMarin Pharmaceutical Inc.

    16.4x     12.6x     NM  

Incyte Corporation

    17.8x     14.3x     39.6x  

Medivation, Inc.

    9.4x     7.5x     20.5x  

Seattle Genetics, Inc.

    10.7x     8.6x     NM  

        Companies that had a revenue multiple greater than 30.0x or less than 0.0x and multiples of share price to estimated earnings per share greater than 50.0x or less than 0.0x were excluded from the applicable summary statistic above as outliers (which are indicated in this section as "NM").

        Based on the above analysis, J.P. Morgan then selected a multiple reference range of 9.0x - 13.0x and 7.5 - 9.5x for the FV / Revenue multiples for 2016 and 2017, respectively, and a P/E multiple reference range of 18.0x - 21.0x for 2017. After applying such ranges to the appropriate Pharmacyclics metrics, which, in the case of the FV / Revenue multiples were based on 50% of estimated worldwide IMBRUVICA® (ibrutinib) product revenue of $1.355 billion and $1.888 billion for 2016 and 2017, respectively, as set forth in the projected financial information provided by Pharmacyclics to J.P. Morgan, the analysis indicated the following implied per share equity values of Pharmacyclics shares, as compared to the merger consideration of $261.25 per share:

 
  Implied Value
Per Share

FV / 2016E Revenue

  $163.00 - $230.00

FV / 2017E Revenue

  $188.00 - $234.00

P/E 2017E

  $202.00 - $236.00

        Using publicly available information from SEC filings, relevant press releases and FactSet Research Systems, J.P. Morgan examined selected transactions with respect to the firm value implied for the target company (calculated on the basis of the consideration payable in the selected transactions) as a multiple of the target company's two-year forward estimated revenues, at the time of the transaction announcement (which we refer to in this section as "Two-Year Forward FV / Revenue"). The forward-looking two-year period that was used in each case was the same calendar year for transactions announced prior to June 30 of a given year and the next calendar year for transactions announced

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following June 30 of a given year. The transactions considered and the resulting Two-Year Forward FV / Revenue multiples are as follows:

Announcement Date
  Acquiror   Target   Two-Year
Forward
FV / Revenue
December 8, 2014   Merck & Co., Inc.   Cubist Pharmaceuticals, Inc.   5.9x
August 24, 2014   Roche Holdings, Ltd   InterMune, Inc.   14.0x
December 19, 2013   Bayer AG   Algeta ASA   10.4x
August 25, 2013   Amgen Inc.   Onyx Pharmaceuticals, Inc.   7.9x
June 29, 2012   Bristol-Myers Squibb Company   Amylin Pharmaceuticals, Inc.   7.8x
November 21, 2011   Gilead Sciences, Inc.   Pharmasset, Inc.   NM
February 16, 2011   Sanofi-Aventis   Genzyme Corporation   4.0x
June 30, 2010   Celgene Corporation   Abraxis BioScience, Inc.   5.8x
May 16, 2010   Astellas Pharma Inc.   OSI Pharmaceuticals, Inc.   6.8x
October 6, 2008   Eli Lilly and Company   ImClone Systems Incorporated   6.5x
April 10, 2008   Takeda Pharmaceutical Company Ltd   Millennium Pharmaceuticals, Inc.   12.0x
December 10, 2007   Eisai Co., Ltd.   MGI Pharma, Inc.   5.5x
November 18, 2007   Celgene Corporation   Pharmion Corporation   4.9x
April 23, 2007   AstraZeneca PLC   MedImmune Inc.   9.1x

        The low and high two-year forward estimated FV / Revenue multiples of the selected transactions ranged from 4.0x to 14.0x. Based on the results of this analysis and other factors that J.P. Morgan considered appropriate (including comparing recent transactions involving companies that each had a 3-year revenue compound annual growth rate exceeding 20%), J.P. Morgan applied a Two-Year Forward FV / Revenue multiple range of 8.0x to 14.0x to the appropriate Pharmacyclics metrics, which, in the case of the Two-Year Forward FV / Revenue multiple ranges, were based on 50% of estimated worldwide IMBRUVICA® (ibrutinib) product revenue as set forth in the projected financial information provided by Pharmacyclics to J.P. Morgan. This analysis produced a range of implied equity values as follows, as compared to the merger consideration of $261.25 per share:


Transaction Analysis Implied Equity Value for Pharmacyclics

 
  Implied Value
Per Share

Two Year Forward FV / Revenue

  $147.00 - $247.00

        No company, business or transaction used in this analysis is identical to Pharmacyclics or the offer and the merger, and accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics, market conditions and other factors that could affect the acquisition or other values of the companies, businesses or transactions to which Pharmacyclics and the offer and the merger were compared or perspectives regarding the transactions selected for comparative purposes.

        J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining an implied fully diluted equity value per share for Pharmacyclics. A discounted cash flow analysis is a method of evaluating an asset using estimates of the future unlevered free cash flows generated by the asset and taking into consideration the time value of money with respect to those future cash flows by calculating their "present value." The "unlevered free cash flows" refers to a calculation of the future cash flows of an asset without including in such calculation any debt servicing costs. Specifically, unlevered free cash flow represents unlevered net operating profit after tax (including stock based compensation expenses but excluding expenditures for non-IMBRUVICA® (ibrutinib) pipeline programs), adjusted

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for, as applicable, depreciation, capital expenditures, changes in net working capital, and a one-time cash repayment expense of approximately $134 million to Janssen. "Present value" refers to the current value of one or more future cash payments from the asset, which is referred to as that asset's cash flows, and is obtained by discounting those cash flows back to the present using a discount rate that takes into account macro-economic assumptions and estimates of risk, the opportunity cost of capital, capitalized returns and other appropriate factors. "Terminal value" refers to the capitalized value of all cash flows from an asset for periods beyond the projections period.

        J.P. Morgan calculated the present value of unlevered free cash flows that Pharmacyclics is expected to generate during the remainder of 2015 and calendar years 2016 through 2028 based upon financial projections prepared by the management of Pharmacyclics. J.P. Morgan also calculated a range of terminal values for Pharmacyclics at December 31, 2028 by applying perpetual growth decline rates, which were chosen based upon guidance of management of Pharmacyclics to reflect the declining value of Pharmacyclics' patent portfolio, ranging from 70% to 90% for unlevered free cash flows in the United States, and perpetual growth decline rates ranging from 30% to 70% for unlevered free cash flows outside of the United States, respectively, to the unlevered free cash flows of Pharmacyclics during 2028. The unlevered free cash flows and the range of terminal values were then discounted to present values using a discount rate range of 8.5% to 10.5%, which was chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of Pharmacyclics, derived using the Capital Asset Pricing Model, taking into account certain metrics that J.P. Morgan deemed relevant in its professional judgment and experience, including long-term U.S. treasury bond yield, levered and unlevered betas for selected companies and the equity risk premium, in addition to target capital structure and the estimated cost of debt and tax rate.

        The present value of the unlevered free cash flows and the range of terminal values were then adjusted by adding $750 million, representing the estimated value of non-IMBRUVICA® (ibrutinib) pipeline programs as of March 3, 2015, calculated based upon guidance of management of Pharmacyclics and J.P. Morgan's analysis of selected publicly-traded development-state biopharmaceutical companies (based on information J.P. Morgan obtained from SEC filings, FactSet Research Systems and other Wall Street research):


Selected Publicly-Traded Development-State Biopharmaceutical Companies

 
  Firm Value  
 
  (in millions)
 
Merrimack Pharmaceuticals, Inc.   $ 1,566  
Acceleron Pharma, Inc.   $ 1,271  
Array BioPharma Inc.   $ 1,145  
MacroGenics, Inc.   $ 813  
Alder Biopharmaceuticals, Inc.   $ 792  
Karyopharm Therapeutics, Inc.   $ 684  
Epizyme, Inc.   $ 636  
OncoMed Pharmaceuticals, Inc.   $ 600  
Galápagos NV   $ 462  
Five Prime Therapeutics, Inc.   $ 448  

        The present value of the unlevered free cash flows and the range of terminal values were also adjusted by adding an estimated net cash balance of $850 million as of March 31, 2015, as provided by management of Pharmacyclics, to indicate, based on the foregoing analyses, a range of implied fully diluted equity values per share of Pharmacyclics of $191.00 and $219.00, as compared to the merger consideration of $261.25 per share.

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        J.P. Morgan reviewed the 52-week trading range of Pharmacyclics share prices for the period ending February 24, 2015, which was $85.85 per share to $188.45 per share, and compared that to the closing price of $188.45 as of February 24, 2015, the day prior to the first public reports that Pharmacyclics was exploring options, including a sale of the company. J.P. Morgan also reviewed the trading range of Pharmacyclics' share prices for the period between February 25, 2015, the day of the first public reports that Pharmacyclics was exploring options, including a sale of the company, and March 3, 2015, which was $188.45 per share to $221.29 per share, and compared that to the closing price of $216.77 as of March 3, 2015. J.P. Morgan compared the trading ranges to the merger consideration of $261.25 per share. J.P. Morgan noted that historical trading range analyses were presented merely for reference purposes only, and were not relied upon for valuation purposes.

        J.P. Morgan reviewed the price targets of public equity research analysts for Pharmacyclics which provided a reference range of $128.00 per share to $253.00 per share for the period ending February 24, 2015, the day prior to the first public reports that Pharmacyclics was exploring options, including a sale of the company, and compared that to the closing price of $188.45 as of February 24, 2015. J.P. Morgan also reviewed the price targets of public equity research analysts for Pharmacyclics which provided a reference range of $210.00 per share to $274.00 per share for the period between February 25, 2015, the day of the first news leak, and March 3, 2015, and compared that to the closing price of $216.77 as of March 3, 2015. J.P. Morgan compared the analyst price targets analysis to the merger consideration of $261.25 per share. J.P. Morgan noted that the analyst price targets were presented merely for reference purposes only, and were not relied upon for valuation purposes.

        The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion.

        Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan's analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be bought or sold. None of the selected companies reviewed as described in the above summary is identical to Pharmacyclics, and none of the selected transactions reviewed was identical to the offer and the merger. However, the companies selected were chosen because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan's analysis, may be considered similar to those of Pharmacyclics. The transactions selected were similarly chosen because their participants, size and other factors, for purposes of J.P. Morgan's analysis, may be considered similar to the offer and the merger. The analyses necessarily involve complex considerations

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and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to Pharmacyclics and the transactions compared to the offer and the merger.

        As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for estate, corporate and other purposes. J.P. Morgan was selected to advise Pharmacyclics with respect to the offer and the merger on the basis of such experience and its familiarity with Pharmacyclics.

        J.P. Morgan has acted as financial advisor to Pharmacyclics with respect to the offer and the merger and will receive a fee from Pharmacyclics for its services equal to a total of approximately $40.8 million, $1.5 million of which was payable upon the rendering of J.P. Morgan's opinion and approximately $39.3 million of which will become payable only if the offer and the merger are consummated. In addition, Pharmacyclics has agreed to reimburse J.P. Morgan for the reasonable fees and expenses of J.P. Morgan's legal counsel, and will indemnify J.P. Morgan against certain liabilities that may arise out of J.P. Morgan's engagement, including liabilities arising under the Federal securities laws. During the two years preceding the date of its opinion, J.P. Morgan and its affiliates have had commercial or investment banking relationships with Pharmacyclics and AbbVie, for which J.P. Morgan and its affiliates have received customary compensation. Such services during such period have included acting as bookrunner on Pharmacyclics' equity offering in March 2013, as financial advisor to AbbVie in connection with its proposed acquisition of Shire plc in July 2014, as bookrunner and administrative agent on AbbVie's bridge financing in connection with such proposed acquisition in July 2014, as financial advisor to AbbVie in connection with certain strategic planning (other than the offer and the merger) in January 2015 and as bookrunner and arranger for AbbVie's revolving credit facility in October 2014. In addition, J.P. Morgan's commercial banking affiliate is an agent bank and a lender under outstanding credit facilities of AbbVie, for which it receives customary compensation or other financial benefits. During the two years preceding the date of its opinion, J.P. Morgan received approximately $5,574,000 in fees from Pharmacyclics and approximately $99,598,000 in fees from AbbVie. In the ordinary course of J.P. Morgan's businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities of Pharmacyclics or AbbVie for their own accounts or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities.

Elections and Proration

        Pharmacyclics stockholders electing the mixed consideration will not be subject to proration; however, holders electing the all-cash consideration or the all-stock consideration may receive a different form of consideration than selected. Pharmacyclics stockholders who make the all-cash election or the all-stock election will be subject to proration to ensure that approximately 41.7% of the aggregate consideration in the offer will be paid in shares of AbbVie common stock and approximately 58.3% of the aggregate consideration in the offer (as reduced by the Pharmacyclics shares held by stockholders who have properly exercised and perfected dissenters' rights under the DGCL) will be paid in cash. Further proration may be required to ensure the receipt of an opinion by each of AbbVie and Pharmacyclics from their respective legal counsel to the effect that the offer and the merger, taken together, will qualify as a "reorganization" within the meaning of Section 368(a) of the Code. The receipt of these opinions is a condition to the offer.

        Pharmacyclics stockholders who otherwise would be entitled to receive a fractional share of AbbVie common stock will instead receive an amount in cash (without interest) equal to the amount of such fraction multiplied by the volume weighted average sale price per share of AbbVie common stock as reported on the NYSE for the ten consecutive trading days ending on and including the second

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trading day prior to the final expiration date of the offer, as calculated by Bloomberg Financial LP under the function "ABBV UN Equity AQR".

        The number of Pharmacyclics shares that will receive the all-cash consideration in the offer will be calculated as follows:

        The number of Pharmacyclics shares that will receive the all-stock consideration in the offer will be calculated as follows:

        If the number of Pharmacyclics shares validly tendered and not properly withdrawn in the offer making an all-cash election is greater than the number of Pharmacyclics shares to receive the all-cash consideration in the offer as calculated above, such shares will be subject to proration. If proration applies to the Pharmacyclics shares making an all-cash election in the offer, the percentage of Pharmacyclics shares making an all-cash election that will receive the all-cash consideration in the offer will be equal to the following:

All such prorations will be applied on a pro rata basis, such that each Pharmacyclics stockholder who tenders shares subject to an all-cash election bears its proportionate share of the proration. If proration applies to the Pharmacyclics shares with respect to which an all-cash election has been made, the shares that do not receive the all-cash consideration due to proration will receive the all-stock consideration.

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        If the number of Pharmacyclics shares validly tendered and not properly withdrawn in the offer making an all-stock election is greater than the number of Pharmacyclics shares to receive the all-stock consideration in the offer as calculated above, such shares will be subject to proration. If proration applies to the Pharmacyclics shares making an all-stock election in the offer, the percentage of Pharmacyclics shares making an all-stock election that will receive the all-stock consideration will be equal to the following:

All such prorations will be applied on a pro rata basis, such that each Pharmacyclics stockholder who tenders shares subject to an all-stock election bears its proportionate share of the proration. If proration applies to the Pharmacyclics shares with respect to which an all-stock election has been made, the shares that do not receive the all-stock consideration due to proration will receive the all-cash consideration.

        See "Risk Factors—Pharmacyclics stockholders may not receive all consideration in the form elected."

Consequences of Tendering with No Election

        Pharmacyclics stockholders who validly tender and do not properly withdraw their Pharmacyclics shares in the offer and do not make an election will be deemed to have elected to receive the mixed consideration.

Distribution of Offering Materials

        This document, the related letter of election and transmittal and other relevant materials will be delivered to record holders of shares and to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on Pharmacyclics' stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, so that they can in turn send these materials to beneficial owners of shares.

Expiration of the Offer

        The offer is scheduled to expire at 5:00 p.m., New York City time, on May 1, 2015 which is the "expiration date," unless further extended by AbbVie. "Expiration date" means May 1, 2015, unless and until the Offeror has extended the period during which the offer is open, subject to the terms and conditions of the merger agreement, in which event the term "expiration date" means the latest time and date at which the offer, as so extended by the Offeror, will expire.

Extension, Termination and Amendment

        Subject to the provisions of the merger agreement and the applicable rules and regulations of the SEC, and unless Pharmacyclics consents otherwise or the merger agreement is otherwise terminated, the Offeror must (1) extend the offer in the event that any of the conditions to the offer (including the minimum tender condition) have not been satisfied or waived as of any then scheduled expiration of the offer, for periods of up to ten business days each in order to further seek to satisfy the conditions

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to the offer, and (2) extend the offer for the minimum period required by any rule, regulation, interpretation or position of the SEC or its staff or NASDAQ which is applicable to the offer or to the extent necessary to resolve any comments of the SEC or its staff applicable to the offer or the Schedule TO.

        The merger agreement prohibits the Offeror and AbbVie from making certain changes to the offer or waiving certain conditions to the offer without the express written consent of Pharmacyclics. Changes to the offer that require the express written consent of Pharmacyclics include changes (i) to the terms or conditions to the offer that change the form of consideration to be paid in the offer, (ii) that decrease the consideration in the offer or the number of shares sought in the offer, (iii) that extend the offer (other than extensions required by law or SEC or NASDAQ regulation, or extensions of up to ten business days each if any of the conditions to the offer have not been satisfied or waived as of the then-scheduled expiration date of the offer in order to seek the satisfaction of such conditions), (iv) that impose conditions in the offer not included in the merger agreement, or (v) that amend any other terms or conditions of the offer in a manner adverse to Pharmacyclics stockholders. Conditions to the offer that the Offeror and AbbVie may not waive without the express written consent of Pharmacyclics include (i) the minimum tender condition, (ii) the receipt of required regulatory approvals, (iii) lack of legal prohibitions, (iv) the approval for listing on the NYSE of the shares of AbbVie common stock to be issued in the offer (or the exemption of such shares from such listing requirements) , (v) the receipt of an opinion by each of AbbVie and Pharmacyclics from their respective legal counsel to the effect that the offer and the merger, taken together, will qualify as a "reorganization" within the meaning of Section 368(a) of the Code, and (vi) the effectiveness of the registration statement on Form S-4 of which this document is a part.

        The Offeror will effect any extension, termination, amendment or delay by giving oral or written notice to the exchange agent and by making a public announcement as promptly as practicable thereafter. In the case of an extension, any such announcement will be issued no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled expiration date. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that any material change in the information published, sent or given to stockholders in connection with the offer be promptly disseminated to stockholders in a manner reasonably designed to inform them of such change) and without limiting the manner in which the Offeror may choose to make any public announcement, the Offeror assumes no obligation to publish, advertise or otherwise communicate any such public announcement of this type other than by issuing a press release.

        If the Offeror materially changes the terms of the offer or the information concerning the offer, or if the Offeror waives a material condition of the offer, the Offeror will extend the offer to the extent legally required under the Exchange Act. If, prior to the expiration date, the Offeror changes the percentage of shares being sought or the consideration offered, that change will apply to all Pharmacyclics stockholders whose shares are accepted for exchange pursuant to the offer. If at the time notice of that change is first published, sent or given to Pharmacyclics stockholders, the offer is scheduled to expire at any time earlier than the tenth business day from and including the date that such notice is first so published, sent or given, the Offeror will extend the offer until the expiration of that ten business day period. For purposes of the offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time.

        No subsequent offering period will be available after the offer.

Exchange of Shares; Delivery of Cash and Shares of AbbVie Common Stock

        AbbVie has retained Computershare Trust Company, N.A. as the depositary and exchange agent for the offer (the "exchange agent") to handle the exchange of shares for the offer consideration and for the merger.

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        Upon the terms and subject to the satisfaction or waiver of the conditions of the offer (including, if the offer is extended or amended, the terms and conditions of any such extension or amendment), the Offeror will accept for exchange, and will exchange, shares validly tendered and not properly withdrawn promptly after the expiration date. In all cases, a Pharmacyclics stockholder will receive consideration for tendered Pharmacyclics shares only after timely receipt by the exchange agent of certificates for those shares, or a confirmation of a book-entry transfer of those shares into the exchange agent's account at The Depository Trust Company ("DTC"), a properly completed and duly executed letter of election and transmittal, or an agent's message in connection with a book-entry transfer, and any other required documents.

        For purposes of the offer, the Offeror will be deemed to have accepted for exchange shares validly tendered and not properly withdrawn if and when it notifies the exchange agent of its acceptance of those shares pursuant to the offer. The exchange agent will deliver to the applicable Pharmacyclics stockholders any cash and shares of AbbVie common stock issuable in exchange for shares validly tendered and accepted pursuant to the offer as soon as practicable after receipt of such notice. The exchange agent will act as the agent for tendering Pharmacyclics stockholders for the purpose of receiving cash and shares of AbbVie common stock from the Offeror and transmitting such cash and stock to the tendering Pharmacyclics stockholders. Pharmacyclics stockholders will not receive any interest on any cash that the Offeror pays in the offer, even if there is a delay in making the exchange.

        If the Offeror does not accept any tendered Pharmacyclics shares for exchange pursuant to the terms and conditions of the offer for any reason, or if certificates are submitted representing more shares than are tendered for, the Offeror will return certificates for such unexchanged shares without expense to the tendering stockholder or, in the case of shares tendered by book-entry transfer into the exchange agent's account at DTC pursuant to the procedures set forth below in "—Procedure for Tendering," the shares to be returned will be credited to an account maintained with DTC as soon as practicable following expiration or termination of the offer.

Withdrawal Rights

        Pharmacyclics stockholders can withdraw tendered Pharmacyclics shares at any time until the expiration date and, if the Offeror has not agreed to accept the shares for exchange on or prior to May 21, 2015, Pharmacyclics stockholders can thereafter withdraw their shares from tender at any time after such date until the Offeror accepts shares for exchange.

        For the withdrawal of shares to be effective, the exchange agent must receive a written notice of withdrawal from the Pharmacyclics stockholder at one of the addresses set forth on the back cover of this document, prior to the expiration date. The notice must include the Pharmacyclics stockholder's name, address, social security number, the certificate number(s), the number of shares to be withdrawn and the name of the registered holder, if it is different from that of the person who tendered those shares, and any other information required pursuant to the offer or the procedures of DTC, if applicable.

        A financial institution must guarantee all signatures on the notice of withdrawal, unless the shares to be withdrawn were tendered for the account of an eligible institution. Most banks, savings and loan associations and brokerage houses are able to provide signature guarantees. An "eligible institution" is a financial institution that is a participant in the Securities Transfer Agents Medallion Program.

        If shares have been tendered pursuant to the procedures for book-entry transfer discussed under the section entitled "—Procedure for Tendering," any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn shares and must otherwise comply with DTC's procedures. If certificates have been delivered or otherwise identified to the exchange agent, the name of the registered holder and the serial numbers of the particular certificates evidencing

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the shares withdrawn must also be furnished to the exchange agent, as stated above, prior to the physical release of such certificates.

        The Offeror will decide all questions as to the form and validity (including time of receipt) of any notice of withdrawal in its sole discretion, and its decision will be final and binding. None of the Offeror, AbbVie, Pharmacyclics, the exchange agent, the information agent or any other person is under any duty to give notification of any defects or irregularities in any tender or notice of withdrawal or will incur any liability for failure to give any such notification. Any shares properly withdrawn will be deemed not to have been validly tendered for purposes of the offer. However, a Pharmacyclics stockholder may re-tender withdrawn shares by following the applicable procedures discussed under the section "—Procedure for Tendering" at any time prior to the expiration date.

Procedure for Tendering

        For a Pharmacyclics stockholder to validly tender Pharmacyclics shares pursuant to the offer:

        The term "agent's message" means a message transmitted by DTC to, and received by, the exchange agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the DTC participant tendering the shares that are the subject of such book-entry confirmation, that such participant has received and agrees to be bound by the terms of the letter of election and transmittal and that the Offeror may enforce that agreement against such participant.

        The exchange agent has established an account with respect to the shares at DTC in connection with the offer, and any financial institution that is a participant in DTC may make book-entry delivery of shares by causing DTC to transfer such shares prior to the expiration date into the exchange agent's account in accordance with DTC's procedure for such transfer. However, although delivery of shares may be effected through book-entry transfer at DTC, the letter of election and transmittal with any required signature guarantees, or an agent's message, along with any other required documents, must, in any case, be received by the exchange agent at one of its addresses set forth on the back cover of this document prior to the expiration date. The Offeror cannot assure Pharmacyclics stockholders that book-entry delivery of shares will be available. If book-entry delivery is not available, Pharmacyclics stockholders must tender shares by means of delivery of Pharmacyclics share certificates. We are not providing for guaranteed delivery procedures and therefore you must allow sufficient time for the necessary tender procedures to be completed during normal business hours of DTC prior to the expiration date. Tenders received by the exchange agent after the expiration date will be disregarded and of no effect.

        Signatures on all letters of election and transmittal must be guaranteed by an eligible institution, except in cases in which shares are tendered either by a registered holder of shares who has not

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completed the box entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" on the letter of election and transmittal or for the account of an eligible institution.

        If the certificates for shares are registered in the name of a person other than the person who signs the letter of election and transmittal, or if certificates for unexchanged shares are to be issued to a person other than the registered holder(s), the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates, with the signature(s) on the certificates or stock powers guaranteed by an eligible institution.

        The method of delivery of Pharmacyclics share certificates and all other required documents, including delivery through DTC, is at the option and risk of the tendering Pharmacyclics stockholder, and delivery will be deemed made only when actually received by the exchange agent. If delivery is by mail, the Offeror recommends registered mail with return receipt requested and properly insured. In all cases, Pharmacyclics stockholders should allow sufficient time to ensure timely delivery.

        To prevent U.S. federal income tax backup withholding, each Pharmacyclics stockholder, other than a stockholder exempt from backup withholding as described below, must provide the exchange agent with its correct taxpayer identification number and certify that it is not subject to backup withholding of U.S. federal income tax by completing the IRS Form W-9 included in the letter of election and transmittal. Certain stockholders (including, among others, certain foreign persons) are not subject to these backup withholding and reporting requirements. In order for a foreign person to qualify as an exempt recipient, the stockholder must submit an IRS Form W-8BEN, or other applicable IRS Form W-8, signed under penalties of perjury, attesting to such person's exempt status.

        The tender of shares pursuant to any of the procedures described above will constitute a binding agreement between the Offeror and the tendering Pharmacyclics stockholder upon the terms and subject to the satisfaction or waiver of the conditions of the offer.

No Guaranteed Delivery

        We are not providing for guaranteed delivery procedures and therefore Pharmacyclics stockholders must allow sufficient time for the necessary tender procedures to be completed during normal business hours of DTC prior to the expiration date. Pharmacyclics stockholders must tender their Pharmacyclics shares in accordance with the procedures set forth in this document. In all cases, the Offeror will exchange shares tendered and accepted for exchange pursuant to the offer only after timely receipt by the exchange agent of certificates for shares (or timely confirmation of a book-entry transfer of such shares into the exchange agent's account at DTC as described above), a properly completed and duly executed letter of election and transmittal (or an agent's message in connection with a book-entry transfer) and any other required documents.

Grant of Proxy

        By executing a letter of election and transmittal as set forth above, a Pharmacyclics stockholder irrevocably appoints the Offeror's designees as such Pharmacyclics stockholder's attorneys-in-fact and proxies, each with full power of substitution, to the full extent of such stockholder's rights with respect to its shares tendered and accepted for exchange by the Offeror and with respect to any and all other shares and other securities issued or issuable in respect of those shares on or after the expiration date. That appointment is effective, and voting rights will be affected, when and only to the extent that the Offeror accepts tendered Pharmacyclics shares for exchange pursuant to the offer and deposits with the exchange agent the cash consideration or the shares of AbbVie common stock consideration for such shares. All such proxies will be considered coupled with an interest in the tendered Pharmacyclics shares and therefore will not be revocable. Upon the effectiveness of such appointment, all prior proxies that the Pharmacyclics stockholder has given will be revoked, and such stockholder may not

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give any subsequent proxies (and, if given, they will not be deemed effective). The Offeror's designees will, with respect to the shares for which the appointment is effective, be empowered, among other things, to exercise all of such stockholder's voting and other rights as they, in their sole discretion, deem proper at any annual, special or adjourned meeting of the Pharmacyclics' stockholders or otherwise. The Offeror reserves the right to require that, in order for shares to be deemed validly tendered, immediately upon the exchange of such shares, the Offeror must be able to exercise full voting rights with respect to such shares. However, prior to acceptance for exchange by the Offeror in accordance with terms of the offer, the appointment will not be effective, and the Offeror will have no voting rights as a result of the tender of shares.

Fees and Commissions

        Tendering registered Pharmacyclics stockholders who tender shares directly to the exchange agent will not be obligated to pay any charges or expenses of the exchange agent or any brokerage commissions. Tendering Pharmacyclics stockholders who hold Pharmacyclics shares through a broker or bank should consult that institution as to whether or not such institution will charge the stockholder any service fees in connection with tendering shares pursuant to the offer. Except as set forth in the instructions to the letter of election and transmittal, transfer taxes on the exchange of shares pursuant to the offer will be paid by the Offeror.

Matters Concerning Validity and Eligibility

        The Offeror will determine questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of shares, in its sole discretion, and its determination will be final and binding. The Offeror reserves the absolute right to reject any and all tenders of shares that it determines are not in the proper form or the acceptance of or exchange for which may be unlawful. The Offeror also reserves the absolute right to waive any defect or irregularity in the tender of any shares. No tender of shares will be deemed to have been validly made until all defects and irregularities in tenders of such shares have been cured or waived. None of offeror, AbbVie, Pharmacyclics the exchange agent, the information agent nor any other person will be under any duty to give notification of any defects or irregularities in the tender of any shares or will incur any liability for failure to give any such notification. The Offeror's interpretation of the terms and conditions of the offer (including the letter of election and transmittal and instructions thereto) will be final and binding.

        Pharmacyclics stockholders who have any questions about the procedure for tendering shares in the offer should contact the information agent at the address and telephone number set forth on the back cover of this document.

Announcement of Results of the Offer

        AbbVie will announce the final results of the offer, including whether all of the conditions to the offer have been satisfied or waived and whether the Offeror will accept the tendered Pharmacyclics shares for exchange, as promptly as practicable following the expiration date. The announcement will be made by a press release in accordance with applicable stock exchange requirements.

Ownership of AbbVie After the Offer and the Merger

        Assuming that:

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former Pharmacyclics stockholders would own in the aggregate 8.6% of the outstanding shares of AbbVie common stock if 100% of the Pharmacyclics shares are exchanged in the offer.

Purpose of the Offer and the Merger; Dissenters' Rights

        The purpose of the offer is for AbbVie to acquire control of, and ultimately the entire equity interest in, Pharmacyclics. The offer, as the first step in the acquisition of Pharmacyclics, is intended to facilitate the acquisition of Pharmacyclics. The purpose of the merger is for AbbVie to acquire all outstanding shares not tendered and purchased pursuant to the offer. If the offer is successful, AbbVie intends to consummate the merger promptly after (and on the same date as) the consummation of the offer. Upon consummation of the merger, the surviving company in the merger would become a wholly owned subsidiary of AbbVie.

        If the offer is consummated, AbbVie is not required to and will not seek the approval of Pharmacyclics' remaining public stockholders before effecting the merger. Section 251(h) of the DGCL provides that following consummation of a successful tender offer for a public corporation, and subject to certain statutory provisions, if the acquiring corporation owns at least the amount of shares of each class of stock of the target corporation that would otherwise be required to approve a merger involving the target corporation, and the other stockholders receive the same consideration for their stock in the merger as was payable in the tender offer, the acquiring corporation can effect a merger without the action of the other stockholders of the target corporation. Accordingly, if AbbVie consummates the offer, it intends to effect the closing of the merger without a vote of the Pharmacyclics stockholders in accordance with Section 251(h) of the DGCL.

        No appraisal rights are available to the holders of Pharmacyclics shares in connection with the offer. However, if the merger is consummated, the holders of Pharmacyclics shares immediately prior to the effective time of the first merger who (1) did not tender Pharmacyclics shares in the offer; (2) follow the procedures set forth in Section 262 of the DGCL; and (3) do not thereafter withdraw their demand for appraisal of such shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to have their shares appraised by the Delaware Court of

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Chancery and receive payment of the "fair value" of such shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, as determined by such court.

        The "fair value" of any Pharmacyclics shares could be based upon considerations other than, or in addition to, the price paid in the offer and the market value of such shares. Holders of Pharmacyclics shares should recognize that the value so determined could be higher or lower than, or the same as, the consideration payable in the offer and the merger. Moreover, AbbVie and Pharmacyclics may argue in an appraisal proceeding that, for purposes of such proceeding, the fair value of such Pharmacyclics shares is less than such amount.

        Under Section 262 of the DGCL, if a merger is approved under Section 251(h), either a constituent corporation before the effective date of the merger, or the surviving corporation within ten days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and will include in such notice a copy of Section 262 of the DGCL. The Schedule 14D-9 will constitute the formal notice of appraisal rights under Section 262 of the DGCL.

        As will be described more fully in the Schedule 14D-9, if a Pharmacyclics stockholder elects to exercise appraisal rights under Section 262 of the DGCL, such stockholder must do all of the following:

        This does not purport to be a complete statement of the procedures to be followed by Pharmacyclics stockholders desiring to exercise any appraisal rights and is qualified in its entirety by reference to Section 262 of the DGCL. The proper exercise of appraisal rights requires strict and timely adherence to the applicable provisions of Delaware law. A copy of Section 262 of the DGCL will be included as Annex B to the Schedule 14D-9.

        The SEC has adopted Rule 13e-3 under the Exchange Act, which is applicable to certain "going private" transactions, and which may under certain circumstances be applicable to the merger or another business combination following the purchase of shares pursuant to the offer in which the Offeror seeks to acquire the remaining shares not held by it. The Offeror believes that Rule 13e-3 will not be applicable to the merger because it is anticipated that the merger will be effected within one year following the consummation of the offer and, in the merger, stockholders will receive the same consideration as that paid in the offer.

Plans for Pharmacyclics

        In connection with the offer, AbbVie has reviewed and will continue to review various possible business strategies that it might consider in the event that the Offeror acquires control of Pharmacyclics, whether pursuant to the offer, the merger or otherwise. Following a review of additional information regarding Pharmacyclics, these changes could include, among other things, changes in Pharmacyclics' business, operations, personnel, employee benefit plans, corporate structure, capitalization and management.

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        If Pharmacyclics qualifies for termination of registration under the Exchange Act after the offer is consummated, AbbVie intends to seek to have Pharmacyclics withdraw the Pharmacyclics shares from listing on the NASDAQ and to terminate the registration of Pharmacyclics shares under the Exchange Act. See "—Effect of the Offer on the Market for Pharmacyclics Shares; NASDAQ Listing; Registration Under the Exchange Act; Margin Regulations."

        Upon consummation of the merger, the directors of the Offeror immediately prior to the merger will be the directors of the surviving company in the merger, and the officers of Pharmacyclics immediately prior to the merger will be the officers of the surviving company. After AbbVie's review of Pharmacyclics and its corporate structure, management and personnel, AbbVie will determine what additional changes, if any, are desirable.

        For a period of five years after the closing of the merger, AbbVie has agreed to maintain the name of the surviving company in the merger as "Pharmacyclics" and to maintain such entity as the primary operating entity which owns and markets IMBRUVICA® (ibrutinib) in the United States (provided that AbbVie may substitute another entity for the surviving company in order to facilitate certain internal planning and management). For the same period, AbbVie has agreed to market IMBRUVICA® (ibrutinib) (and any future versions) under the "IMBRUVICA® (ibrutinib)" trade name, and to display such name in greater size and prominence than other AbbVie trade names on such products, and to display the IMBRUVICA® (ibrutinib) trade name on all packaging materials, labels and promotional materials relating to IMBRUVICA® (ibrutinib). AbbVie's obligations pursuant to the merger agreement will not restrict the taking of any actions reasonably required in order to comply with applicable law or agreements in effect as of the date of the merger agreement, or necessary in the reasonable judgment of AbbVie's board of directors to exercise its fiduciary duties.

Effect of the Offer on the Market for the Pharmacyclics Shares; NASDAQ Listing; Registration Under the Exchange Act; Margin Regulations

        The purchase of Pharmacyclics shares by the Offeror pursuant to the offer will reduce the number of holders of Pharmacyclics shares and the number of Pharmacyclics shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Pharmacyclics shares held by the public. The extent of the public market for Pharmacyclics shares after consummation of the offer and the availability of quotations for such shares will depend upon a number of factors, including the number of stockholders holding Pharmacyclics shares, the aggregate market value of the Pharmacyclics shares held by the public at such time, the interest of maintaining a market in the Pharmacyclics shares, analyst coverage of Pharmacyclics on the part of any securities firms and other factors.

        The Pharmacyclics shares are currently quoted on the NASDAQ. However, the rules of NASDAQ establish certain criteria that, if not met, could lead to the discontinuance of quotation of Pharmacyclics shares from NASDAQ. Among such criteria are the number of stockholders, the number of shares publicly held and the aggregate market value of the shares publicly held. If, as a result of the purchase of Pharmacyclics shares pursuant to the offer or otherwise, Pharmacyclics shares no longer meet the

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requirements of NASDAQ for continued quotation and the quotation of Pharmacyclics shares is discontinued, the market for Pharmacyclics shares would be adversely affected.

        Following the consummation of the offer, it is possible that Pharmacyclics shares would be traded on other securities exchanges (with trades published by such exchanges), the OTC Bulletin Board or in a local or regional over-the-counter market. The extent of the public market for Pharmacyclics shares would, however, depend upon the number of holders of Pharmacyclics shares and the aggregate market value of Pharmacyclics shares remaining at such time, the interest in maintaining a market in Pharmacyclics shares on the part of securities firms, the possible termination of registration of Pharmacyclics shares under the Exchange Act, as described below, and other factors.

        The Pharmacyclics shares are currently "margin securities" under the Regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which designation has the effect, among other effects, of allowing brokers to extend credit on the collateral of Pharmacyclics shares. Depending upon factors similar to those described above regarding the market for Pharmacyclics shares and stock quotations, it is possible that, following the offer, Pharmacyclics shares would no longer constitute "margin securities" for the purposes of the margin regulations of the Federal Reserve Board and, therefore, could no longer be used as collateral for loans made by brokers.

        The Pharmacyclics shares are currently registered under the Exchange Act. Such registration may be terminated upon application by Pharmacyclics to the SEC if Pharmacyclics shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of Pharmacyclics shares under the Exchange Act would substantially reduce the information required to be furnished by Pharmacyclics to its stockholders and to the SEC and would make certain provisions of the Exchange Act no longer applicable to Pharmacyclics, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with meetings of stockholders and the related requirement of furnishing an annual report to stockholders and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions. Furthermore, the ability of "affiliates" of Pharmacyclics and persons holding "restricted securities" of Pharmacyclics to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired. If registration of Pharmacyclics shares under the Exchange Act were terminated, Pharmacyclics shares would no longer be "margin securities" or be eligible for quotation on NASDAQ as described above. After consummation of the offer, AbbVie and the Offeror currently intend to cause Pharmacyclics to terminate the registration of Pharmacyclics shares under the Exchange Act as soon as the requirements for termination of registration are met.

Conditions of the Offer

        The Offeror will not accept for exchange or exchange any Pharmacyclics shares, may postpone the acceptance for exchange, or the exchange, of tendered Pharmacyclics shares, if at the expiration date any of the following conditions is not satisfied or validly waived:

        There must have been validly tendered and not properly withdrawn in accordance with the terms of the offer a number of shares that, together with the shares then owned by AbbVie and the Offeror (if any), represents at least a majority of the Pharmacyclics shares outstanding as of the expiration of the offer.

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        Any applicable waiting period under the HSR Act must have expired or been terminated.

        The other conditions to the offer are as follows:

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        However, certain specified conditions may only be waived by AbbVie or the Offeror with the express written consent of Pharmacyclics. These conditions include the minimum tender condition, the receipt of required regulatory approvals, lack of legal prohibitions, the shares of AbbVie common stock to be issued in the offer and the merger having been approved for listing on the NYSE or exempt from the listing requirement, the receipt of an opinion by each of AbbVie and Pharmacyclics from their respective legal counsel to the effect that the offer and the merger, taken together, will qualify as a "reorganization" within the meaning of Section 368(a) of the Code, and the registration statement on Form S-4 of which this document is a part having become effective.

Certain Legal Matters; Regulatory Approvals

        AbbVie is not aware of any governmental license or regulatory permit that appears to be material to Pharmacyclics' business that might be adversely affected by the Offeror's acquisition of Pharmacyclics shares pursuant to the offer or, except as described below, of any approval or other action by any government or governmental administrative or regulatory authority or agency, domestic or foreign, that would be required for the Offeror's acquisition or ownership of Pharmacyclics shares pursuant to the offer. Should any of these approvals or other actions be required, AbbVie and the Offeror currently contemplate that these approvals or other actions will be sought. There can be no assurance that (a) any of these approvals or other actions, if needed, will be obtained (with or without substantial conditions), (b) if these approvals were not obtained or these other actions were not taken adverse consequences would not result to Pharmacyclics' business, or (c) certain parts of Pharmacyclics' or AbbVie's, or any of their respective subsidiaries', businesses, would not have to be disposed of or held separate, any of which could cause the Offeror to elect to terminate the offer without the exchange of shares under the offer. The Offeror's obligation under the offer to accept for exchange and pay for shares is subject to certain conditions. See "The Offer—Conditions of the Offer."

        AbbVie and Pharmacyclics have agreed to use their reasonable best efforts to comply with all regulatory notification requirements and obtain all regulatory approvals required to consummate the offer and the merger. Under the HSR Act and the rules that have been promulgated thereunder, the offer and the merger cannot be completed until AbbVie and Pharmacyclics file a Notification and Report Form with the FTC and the DOJ under the HSR Act, and the applicable 30-day waiting period has expired or been terminated.

        Pursuant to the requirements of the HSR Act, AbbVie and Pharmacyclics each filed a Notification and Report Form with respect to the offer and the merger with the Antitrust Division of the DOJ and the FTC on March 20, 2015. On April 17, 2015, AbbVie voluntarily withdrew its initial Notification and Report Form under the HSR Act in order to provide the FTC with additional time to review the proposed transaction. A new 30 calendar day waiting period will begin when AbbVie resubmits its Notification and Report Form, which is expected to occur on April 21, 2015.

        At any time before or after consummation of the merger, notwithstanding the termination or expiration of the waiting period under the HSR Act, the FTC or the DOJ could take such action under the antitrust laws as it deems necessary under the applicable statutes, including seeking to enjoin the completion of the merger, seeking divestiture of substantial assets of the parties, or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. At any time before or after the completion of the merger, and notwithstanding the termination or expiration of the waiting period under the HSR Act, any state could take such action under the

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antitrust laws as it deems necessary. Such action could include seeking to enjoin the completion of the merger or seeking divestiture of substantial assets of the parties, or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.

        There can be no assurance that a challenge to the offer on antitrust grounds will not be made, or if such a challenge is made, what the result will be. See "The Offer—Conditions of the Offer" for certain conditions to the offer, including conditions with respect to litigation and certain governmental actions.

        On March 13, 2015, a putative class action lawsuit, Evangelista v. Duggan et al, was filed against Pharmacyclics, the members of the Pharmacyclics board of directors, AbbVie, and certain affiliates of AbbVie in the Superior Court of the State of California, Santa Clara County. Also on March 13, 2015, another putative class action lawsuit, Treppel v. Duggan et al, was filed against the members of the Pharmacyclics board of directors and certain unnamed "Doe" defendants in the Superior Court of the State of California, Santa Clara County. On March 17, 2015, a third putative class action lawsuit, Wang v. Pharmacyclics, Inc. et al, was filed against Pharmacyclics, the members of the Pharmacyclics board of directors, AbbVie, and certain affiliates of AbbVie in the Superior Court of the State of California, Santa Clara County. On March 18, 2015, a fourth putative class action lawsuit, Wallach v. Duggan et al, was filed against Pharmacyclics, the members of the Pharmacyclics board of directors, AbbVie, and certain affiliates of AbbVie in the Superior Court of the State of California, Santa Clara County.

        The lawsuits were each brought on behalf of purported stockholders of Pharmacyclics. Each alleges generally that the members of the Pharmacyclics board of directors breached their fiduciary duties in connection with the offer and the merger by, among other things, (i) failing to maximize the value of Pharmacyclics to its public stockholders, (ii) ignoring or failing to protect against conflicts of interests and (iii) agreeing to unreasonable deal protection devices. In the case of Evangelista v. Duggan et al, Wang v. Pharmacyclics, Inc. et al and Wallach v. Duggan et al, the plaintiffs further allege that AbbVie and its affiliates (and, in the case of Wang v. Pharmacyclics, Inc. et al, Pharmacyclics) aided and abetted the breaches by the members of the Pharmacyclics board of directors of their fiduciary duties. The plaintiffs seek, among other relief, equitable relief to enjoin consummation of the offer and the merger, rescission of the offer and the merger and/or rescissory damages, and attorneys' fees and costs.

        On April 16, 2015, the parties to the four putative class action lawsuits described above entered into a Memorandum of Understanding (the "MOU") in which they agreed in principle on the terms of a proposed settlement of the lawsuits. Pursuant to the terms of the MOU, Pharmacyclics has agreed to make certain supplemental disclosures set forth in an amendment to its Schedule 14D-9, which were sought by the plaintiffs in connection with these lawsuits. The parties to the lawsuits also expect that, in connection with the proposed settlement, counsel for plaintiffs will make an application for an award of attorneys' fees.

        Pharmacyclics, the Pharmacyclics board of directors, AbbVie, and the applicable affiliates of AbbVie each have denied, and continue to deny, that they committed or attempted to commit any violation of law or breach of fiduciary duty owed to Pharmacyclics and/or its stockholders, aided or abetted any breach of fiduciary duty, or otherwise engaged in any of the wrongful acts alleged in these lawsuits. All of the defendants expressly maintain that they complied with their fiduciary and other legal duties. However, in order to avoid the costs, disruption and distraction of further litigation and without admitting the validity of any allegation made in the lawsuits or any liability with respect thereto, the defendants have concluded that it is desirable to settle the claims against them. The proposed settlement will be subject to customary conditions, including completion of appropriate settlement documentation, approval by the appropriate courts, notice to the class and a hearing, and

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consummation of the offer. Notwithstanding the entry into the MOU, there can be no assurance that the proposed settlement will be finalized or that court approval will be granted.

Interests of Certain Persons in the Offer and the Merger

        Pharmacyclics' directors and executive officers may have interests in the offer, the merger, and the other transactions contemplated by the merger agreement that are different from, or in addition to, the interests of the Pharmacyclics stockholders generally. These interests may create potential conflicts of interest. The Pharmacyclics board of directors was aware of these interests and considered them, among other matters, in approving the merger agreement and the transactions contemplated by the merger agreement, as more fully discussed below in "The Offer—Pharmacyclics' Reasons for the Offer and Merger."

        If Pharmacyclics' directors and executive officers were to tender any Pharmacyclics shares they own for purchase pursuant to the offer, they would receive the same consideration on the same terms and conditions as the other stockholders of Pharmacyclics. As of March 19, 2015, Pharmacyclics' directors and executive officers (and affiliates and affiliated investment entities) owned 14,077,934 Pharmacyclics shares in the aggregate (including estimated purchases under the ESPP (as defined below) based on accrued ESPP contributions as of such date but excluding options (as defined below) and restricted stock units (as defined below)). If the directors and executive officers (and affiliates and affiliated investment entities) were to validly tender and not properly withdraw all of their outstanding Pharmacyclics shares pursuant to the offer and those Pharmacyclics shares were accepted for exchange by Offeror, the directors and executive officers (and affiliates and affiliated investment entities) would receive cash and shares of AbbVie common stock having an aggregate value of approximately $3,677,860,258.

        As of March 19, 2015, Pharmacyclics' directors and executive officers held outstanding options to purchase 1,246,304 Pharmacyclics shares (referred to as "options") under Pharmacyclics' 2004 Equity Incentive Award Plan or 2014 Equity Incentive Award Plan (each referred to as a "plan") in the aggregate, with exercise prices ranging from $0.75 to $139.89. Pursuant to the terms of the Pharmacyclics 2004 Equity Incentive Award Plan and the Pharmacyclics 2014 Equity Incentive Award Plan, (i) (A) 50% of each option that is subject to service-based vesting and is unvested as of immediately prior to the effective time of the first merger will immediately vest and become exercisable and (B) the remaining unvested portion of such option will remain unvested except as described herein, (ii) certain options held by non-employee directors as of immediately prior to the effective time of the first merger that were granted under the 2004 Equity Incentive Award Plan will immediately vest in full and become exercisable, and (iii) Ms. Tomasello's options granted pursuant to the terms of her offer letter with Pharmacyclics dated August 7, 2014 will vest in full and become exercisable as of immediately prior to the effective time of the first merger under the terms of such offer letter. While the Pharmacyclics 2004 Equity Incentive Award Plan provides for accelerated vesting of 50% of each option as described in the preceding sentence, the Pharmacyclics 2014 Equity Incentive Award Plan was amended concurrently with the execution of the merger agreement to provide for such accelerated vesting.

        Pursuant to, and as further described in, the merger agreement, AbbVie will not assume any options in connection with the merger or any other transactions contemplated by the merger agreement. Upon the terms and subject to the conditions set forth in the merger agreement, each

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option that is subject to performance-based vesting conditions and is unvested and outstanding as of immediately prior to the effective time of the first merger will become fully vested as of such time, with all applicable performance goals deemed achieved at target levels. Each option that remains outstanding as of immediately prior to the effective time of the first merger (whether vested or unvested) will be cancelled and terminated as of the effective time of the first merger and, in consideration for such cancellation and termination, the holder of each such option will be eligible to receive an amount in cash (without interest) equal to the product obtained by multiplying (x) the aggregate number of Pharmacyclics shares that were issuable upon exercise of such option immediately prior to the effective time of the first merger, by (y) the excess (if any) of the all-cash consideration over the per share exercise price of such option (the "option cash payment"). Each option cash payment will be paid, less any applicable tax withholdings, according to the following schedule: (1) the portion of the option cash payment relating to the portion of each option that is vested as of immediately prior to the effective time of the first merger (after taking into account the vesting acceleration that will occur as of immediately prior to the effective time of the first merger described in the previous paragraph) will be paid as promptly as practicable following the effective time of the first merger; (2) the portion of the option cash payment relating to the remaining unvested portion of each option will be paid in accordance with the vesting terms applicable to such option until December 31 following the effective time of the first merger (the "final payment date"), subject to the holder of such option continuing to provide services to AbbVie or any of its subsidiaries through the applicable vesting date; and (3) the remainder of the option cash payment will be paid on the final payment date, subject to the option holder continuing to provide services to AbbVie or any of its subsidiaries through that date. If, before the applicable vesting date or final payment date, the employment or service of the option holder terminates under circumstances that would give rise to severance benefits under the severance plan (as described in "—Change in Control and Severance Plan") or the option holder dies (in either case, an "equity termination"), then, in either case, any then-unpaid portion of the option cash payment will become immediately payable in a lump sum. The unpaid portion of the option cash payment to any non-employee director will immediately become payable upon the non-employee director ceasing to be a director and service provider of Pharmacyclics after the effective time of the first merger. Please see "—Table of Equity Related Payments" below for additional information.

        As of March 19, 2015, Pharmacyclics' directors and executive officers held outstanding restricted stock units under the Pharmacyclics plans covering a total of 129,000 Pharmacyclics shares. Pursuant to the terms of the applicable plan, (i)(A) 50% of each restricted stock unit award that is subject to service-based vesting and is unvested as of immediately prior to the effective time of the first merger will immediately vest and (B) the remaining unvested portion of such restricted stock unit award will remain unvested except as described herein and (ii) Ms. Tomasello's restricted stock units granted pursuant to the terms of her offer letter with Pharmacyclics dated August 7, 2014 will vest in full as of immediately prior to the effective time of the first merger under the terms of such offer letter. While the Pharmacyclics 2004 Equity Incentive Award Plan provides for accelerated vesting of 50% of each restricted stock unit award as described in the preceding sentence, the Pharmacyclics 2014 Equity Incentive Award Plan was amended concurrently with the execution of the merger agreement to provide for such accelerated vesting.

        Pursuant to, and as further described in, the merger agreement, AbbVie will not assume any restricted stock units in connection with the merger or any other transactions contemplated by the merger agreement. Upon the terms and subject to the conditions set forth in the merger agreement, each restricted stock unit that is subject to performance-based vesting conditions and is unvested and outstanding as of immediately prior to the effective time of the first merger will become fully vested as of such time, with all applicable performance goals deemed achieved at target levels. Each restricted stock unit that remains outstanding as of immediately prior to the effective time of the first merger will

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be cancelled and terminated as of the effective time of the first merger and, as consideration for such cancellation and termination, the holder of each such restricted stock unit will be eligible to receive an amount in cash (without interest), equal to the product obtained by multiplying (x) the aggregate number of Pharmacyclics shares subject to such restricted stock unit grant immediately prior to the effective time of the first merger, by (y) the all-cash consideration (the "RSU cash payment"). Each RSU cash payment will be paid, less any applicable tax withholdings, according to the following schedule: (1) the portion of the RSU cash payment relating to restricted stock units that are vested and unsettled as of immediately prior to the effective time of the first merger (after taking into account the vesting acceleration described in the previous paragraph that will occur as of immediately prior to the effective time of the first merger) will be paid as promptly as practicable following the effective time of the first merger; (2) the portion of the RSU cash payment relating to the remaining unvested restricted stock units will be paid in accordance with the vesting and settlement terms applicable to such restricted stock units until the final payment date, subject to the holder of such restricted stock units continuing to provide services to AbbVie or any of its subsidiaries through the applicable vesting date; and (3) the remainder of the RSU cash payment will be paid on the final payment date, subject to the holder of the restricted stock units continuing to provide services to AbbVie or any of its subsidiaries through that date. If, before the final payment date, the employment or service of the restricted stock unit holder terminates due to an equity termination, then any then-unpaid portion of the RSU cash payment will become immediately payable in a lump sum. The unpaid portion of the RSU cash payment to any non-employee director (other than Dr. Booth) will immediately become payable upon the non-employee director ceasing to be a director of Pharmacyclics after the effective time of the first merger. The unpaid portion of the RSU cash payment to Dr. Booth, who is a consultant and a non-employee director of Pharmacyclics, will become payable to Dr. Booth in accordance with the corresponding restricted stock unit's vesting terms and any unpaid portion of the RSU cash payment as of December 31 following the effective time of the first merger will be paid in a lump sum at such time, subject to Dr. Booth's continued service with AbbVie or its subsidiaries through such time (unless Dr. Booth experiences an earlier equity termination (in all capacities, including as both a consultant and a director) prior to such time, in which case any unpaid portion of this payment will be paid upon such equity termination). Please see "—Table of Equity Related Payments" for additional information.

        Prior to the expiration of the offer, Pharmacyclics' Employee Stock Purchase Plan (the "ESPP"), and each outstanding offering period then in progress, will terminate and each participant's accumulated contributions to the ESPP will be used to purchase Pharmacyclics shares as of such time in accordance with the terms of the ESPP (and any funds that remain in participants' account after such purchase shall be returned to the applicable participants). No employee may elect to participate in the ESPP, and no participant may increase his or her payroll deduction percentages or purchase elections, after March 4, 2015. No new offerings in the ESPP will be made after March 4, 2015.

        As discussed above, all options and restricted stock units held by Pharmacyclics' directors and executive officers will be cancelled in exchange for the option cash payment and RSU cash payment, as and if applicable. Please see "—Table of Equity Related Payments" for additional information.

        The following table sets forth the approximate amount of the payments that each of Pharmacyclics' directors and executive officers would be entitled to receive in connection with the consummation of the offer, the merger, and the other transactions contemplated by the merger agreement assuming that the effective time of the first merger occurred on March 19, 2015 and that each individual received the

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full option cash payment and/or RSU cash payment, as applicable, in respect of such individual's options and/or restricted stock units, as applicable. The information in the following table further assumes that all contributions to the ESPP are applied to the purchase of Pharmacyclics shares immediately prior to March 19, 2015 based on the offering price under the ESPP.

Name
  Number of
Pharmacyclics
Shares
Owned(1)
  Merger
Consideration
for Owned
Shares ($)(2)
  Shares
Subject to
Outstanding
Options(3)
  Option Cash
Payment
($)(4)
  Number of
Outstanding
Restricted
Stock Units(5)
  RSU Cash
Payment
($)(6)
  Total
Payment ($)
 

Directors

                                           

Robert F. Booth, Ph.D. 

            66,549     15,662,411     10,000     2,612,500     18,274,911  

Eric H. Halvorson

    1,000     261,250     31,474     6,692,738             6,953,988  

Kenneth Clark, J.D. 

            24,619     4,846,880             4,846,880  

Minesh P. Mehta, M.D. 

            30,131     6,462,445             6,462,445  

David D. Smith, Ph.D. 

    3,000     783,750     182,110     45,689,234             46,472,984  

Richard A. van den Broek

    29,610     7,735,613     100,342     24,265,415             32,001,028  

Executive Officers

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Robert W. Duggan*

    13,599,690     3,552,919,013                     3,552,919,013  

Mahkam Zanganeh, D.D.S., MBA

    428,281     111,888,411     466,569     108,783,820     15,000     3,918,750     224,590,981  

Manmeet S. Soni

    856     223,630     92,902     15,464,917     54,000     14,107,500     29,796,047  

Heow Tan

    7,994     2,088,433     151,608     31,523,994             33,612,427  

Shawn Tomasello

    7,503     1,960,159     100,000     13,936,000     50,000     13,062,500     28,958,659  

*
Mr. Duggan is both a director and an executive officer. Mr. Duggan does not hold any options or restricted stock units and will not receive any option cash payment or RSU cash payment.

(1)
Based on the number of shares owned (directly or indirectly) as of March 19, 2015.

(2)
Equals (i) the corresponding number of owned Pharmacyclics shares multiplied by (ii) the merger consideration.

(3)
Number shown is the number of Pharmacyclics shares subject to outstanding options (whether vested or unvested) as of March 19, 2015.

(4)
Equals, with respect to all option awards held by the applicable director or executive officer listed in the "Shares Subject to Outstanding Options" column, (i) the number of shares subject to such option award multiplied by (ii) the all-cash consideration minus the exercise price applicable to such option award. The portions of the amounts in this column that will not become payable on the effective time of the first merger (unless the director or executive officer experiences an equity termination upon the effective time of the first merger) are as follows: $51,928 (Dr. Booth, Mr. Halvorson, Mr. Clark, Dr. Mehta, Dr. Smith, and Mr. van den Broek), $0 (Dr. Zanganeh), $748,688 (Mr. Soni), $0 (Mr. Tan), and $0 (Ms. Tomasello). For options that are unvested immediately before the effective time of the first merger (after taking into account the vesting acceleration described in the "—Consideration for Options" section above), the corresponding option cash payment will be paid in accordance with the corresponding option's vesting terms and any unpaid portion of the option cash payment as of December 31 following the effective time of the first merger will be paid in a lump sum at that time subject to the applicable award holder continuing to provide services to AbbVie or its subsidiaries through such date (unless the applicable award holder experiences an equity termination prior to such time, in which case the option cash payment will be paid upon such equity termination). Such amounts for any non-employee director will become payable upon the non-employee director ceasing to be a director and service provider of Pharmacyclics after the effective time of the first merger.

(5)
Number shown is the number of outstanding restricted stock units as of March 19, 2015.

(6)
Equals (i) the corresponding number listed in the "Number of Outstanding Restricted Stock Units" column multiplied by (ii) the all-cash consideration. The portions of the amounts in this column that will not become payable on the effective time of the first merger (unless the director or executive officer experiences an equity termination upon the effective time of the first merger) are as follows: $1,306,250 (Dr. Booth), $1,959,375 (Dr. Zanganeh), $2,873,750 (Mr. Soni), $0 (Mr. Tan) and $0 (Ms. Tomasello). For restricted stock units that are unvested immediately before the effective time of the first merger (after taking into account the vesting acceleration described in the "—Consideration for Restricted Stock Units" section above), the corresponding RSU cash payment will be paid in accordance with the corresponding restricted stock unit's vesting terms and any unpaid portion of the RSU cash payment as of December 31 following the effective time of the first merger will be paid in a lump sum at that time subject to the applicable award holder continuing to provide services to AbbVie or its subsidiaries through such date (unless the applicable award holder experiences an equity termination prior to such time, in which case the RSU cash payment will be paid upon such equity termination). Such amount for Dr. Booth, who is a consultant and a non-employee director of Pharmacyclics, will become payable to Dr. Booth in accordance with the corresponding restricted stock unit's vesting terms and any unpaid portion of the RSU cash payment as of December 31 following the effective time of the first merger will be paid in a lump sum at that time, subject to Dr. Booth's continued service with AbbVie or its subsidiaries (unless Dr. Booth experiences an earlier equity termination (in all capacities, including as both a consultant and a director) prior to such time, in which case this amount will be paid upon such equity termination).

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        As an employee of Pharmacyclics, each executive officer identified in the table above (referred to as an "executive") is eligible to participate in the Pharmacyclics Change in Control and Severance Plan (referred to as the "severance plan"). Under the severance plan, each executive who remains employed with Pharmacyclics or any subsidiary or affiliate of Pharmacyclics through immediately before a "change in control" (which is defined in the severance plan to be the completion of the transactions contemplated by the merger agreement) and who, within the two-year period following such change in control (referred to as the "change in control period"), (x) is involuntarily terminated by Pharmacyclics or any subsidiary or affiliate of Pharmacyclics for any reason other than by reason of such executive's retirement, voluntary resignation, death or "disability" (as defined below), or a termination for "cause" (as defined below) or (y) voluntarily resigns for "good reason" (as defined below) under the circumstances described in the severance plan (such involuntary termination described in clause (x) or voluntary resignation described in clause (y) that occurs during the change in control period, a "qualifying termination"), will receive, subject to the terms and conditions of the severance plan, (i) a lump-sum cash severance payment in an aggregate amount equal to the sum of 100% of such executive's Base Pay (as defined below) and 100% of such executive's "target bonus" (as defined below) and (ii) up to twelve months of company-paid premiums for continuation coverage under the Consolidated Omnibus Reconciliation Act of 1985, as amended (referred to as "COBRA"), for such executive and such executive's family members who have coverage under the Pharmacyclics or successor company plan on the date of such executive's termination. Additionally, each executive who receives any "parachute payments" as determined under Section 280G of the Internal Revenue Code of 1986, as amended (referred to as the "code"), in connection with the change in control will receive a tax "gross-up" payment from Pharmacyclics such that the net amount retained by such executive, after payment of any excise taxes and any federal, state and local income and employment taxes (including any such taxes on the tax gross-up payment itself), would be equal to the net amount the executive would have retained after payment of any federal, state and local income and employment taxes had the payments not been deemed "parachute payments."

        An executive's receipt of any severance benefits under the severance plan (referred to as the "severance plan benefits") is conditioned on the executive timely signing and not revoking a general release of claims in Pharmacyclics' favor as well as the executive complying with the terms of any confidentiality, proprietary information and inventions agreement or other applicable agreement between the executive and Pharmacyclics.

        Under the severance plan, "cause" means, with respect to any executive, the occurrence of any of the following: (a) the executive's conviction of, or plea of nolo contendere to, a felony or any crime involving fraud or embezzlement that has had or will have a material detrimental effect on Pharmacyclics' reputation or business, (b) the executive's willful and intentional gross misconduct that has had or will have a material detrimental effect on Pharmacyclics' reputation or business, (c) the executive's unauthorized use or disclosure of any of Pharmacyclics' proprietary information or trade secrets that has had or will have a material detrimental effect on Pharmacyclics' reputation or business, or (d) the executive's willful and intentional breach of material obligations under a written agreement or covenant with Pharmacyclics that has had or will have a material detrimental effect on Pharmacyclics' reputation or business. Notwithstanding the preceding sentence, Pharmacyclics' termination of an executive's employment will not be treated as for "cause" unless Pharmacyclics first provides the executive with written notice specifically identifying the acts or omissions constituting the grounds for a termination for "cause" and, with respect to clauses (b) through (d), a reasonable cure period of not less than 10 business days following such notice. For purposes of this definition, no act or failure to act by an executive will be considered "willful" unless committed without good faith and without a reasonable belief that the act or omission was in Pharmacyclics' best interest.

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        Under the severance plan, "good reason" means the occurrence of one or more of the following without an executive's express written consent: (a) a material adverse alteration in the executive's position or in the nature or status of the executive's duties and responsibilities from those in effect immediately prior to the change in control; provided, however, that the continued employment of an executive following the change in control with substantially the same duties and responsibilities with respect to Pharmacyclics' business and operations, or an alteration in duties and responsibilities as a result of Pharmacyclics no longer being a publicly traded company, but rather a subsidiary or business unit of the acquirer, will not constitute "good reason", (b) any reduction in the executive's base salary rate or target annual bonus, in each case as in effect immediately prior to the change in control, or (c) the relocation of the executive's principal place of employment to a location that is more than 50 miles from the location where the executive was principally employed at the time of the change in control or a relocation that materially increases the time of the executive's commute as compared to the executive's commute at the time of the change in control (except for required travel on Pharmacyclics business to an extent substantially consistent with the executive's customary business travel obligations in the ordinary course of business prior to the change in control). In order for an executive's termination to be for "good reason," the executive must first provide Pharmacyclics with written notice of the acts or omissions constituting the grounds for "good reason" within 90 days following the executive's knowledge of the initial existence of the grounds for "good reason" specifying in reasonable detail the conditions constituting good reason and a reasonable cure period of 30 days following the date of written notice (referred to as the "cure period"), such grounds must not have been cured during the cure period, and the executive must resign within 2 years following the end of the cure period.

        Under the severance plan, "base pay" means the higher of: (a) an executive's annualized base salary in effect immediately prior to the change in control or (b) such executive's annualized base salary in effect immediately prior to his or her termination of employment (or if the termination is due to a resignation for good reason based on a material reduction in base pay, then the executive's annualized base salary in effect immediately prior to such reduction).

        Under the severance plan, "target bonus" means the higher of: (a) an executive's target annual bonus in effect immediately prior to the change in control or (b) such executive's target annual bonus in effect immediately prior to his or her termination of employment (or if the termination is due to a resignation for good reason based on a material reduction in target annual bonus, then the executive's target annual bonus in effect immediately prior to such reduction).

        The merger agreement provides that AbbVie will cause the ultimate surviving company of the merger to indemnify and hold harmless, to the fullest extent permitted under applicable law, each current and former director, officer and employee of Pharmacyclics and its subsidiaries against liabilities in connection with claims based on or arising out of the fact that such person is or was such an officer, director, employee or other fiduciary of Pharmacyclics. In addition, for six years after the effective time of the merger, the ultimate surviving company of the merger will maintain in effect the current policies of directors' and officers' liability insurance maintained by Pharmacyclics. For a more complete description of the indemnification of the officers and directors of Pharmacyclics and its subsidiaries, see "The Merger Agreement—Directors' and Officers' Indemnification."

        Kenneth A. Clark, a member of the Pharmacyclics board of directors, is also a member of WSGR. Pharmacyclics has retained WSGR as legal counsel on certain matters, including in connection with the offer and the merger and the other transactions contemplated by the merger agreement.

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        Pursuant to the merger agreement, prior to the effective time, Pharmacyclics and AbbVie have agreed to, as applicable, take all such steps as may be reasonably necessary or advisable hereto to cause any dispositions of equity securities of Pharmacyclics (including derivative securities) and acquisitions of equity securities of AbbVie pursuant to the transactions contemplated by the merger agreement by each individual who is a director or officer of Pharmacyclics subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Pharmacyclics to be exempt under Rule 16b-3 promulgated under the Exchange Act.

        The merger agreement provides that the Compensation Committee of the Pharmacyclics board of directors, at a meeting to be held prior to the expiration of the offer, will duly adopt resolutions approving as an "employment compensation, severance or other employee benefit arrangement" within the meaning of Rule 14d-10(d)(1) under the Exchange Act (i) each arrangement related to certain payments made or to be made and certain benefits granted or to be granted according to employment compensation, severance and other employee benefit plans of Pharmacyclics and (ii) the treatment of Company Equity Awards (as defined in the merger agreement) in accordance with the terms of the merger agreement. In addition, the Compensation Committee of the Pharmacyclics board of directors will take all other actions necessary to satisfy the requirements of the non-exclusive safe harbor within Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing matters.

Certain Relationships With Pharmacyclics

        As of the date of this document, AbbVie does not own any Pharmacyclics shares. Neither AbbVie nor the Offeror have effected any transaction in securities of Pharmacyclics in the past 60 days. To the best of AbbVie and the Offeror's knowledge, after reasonable inquiry, none of the persons listed on Annex D hereto, nor any of their respective associates or majority-owned subsidiaries, beneficially owns or has the right to acquire any securities of Pharmacyclics or has effected any transaction in securities of Pharmacyclics during the past 60 days.

Source and Amount of Funds

        The offer and the merger are not conditioned upon any financing arrangements or contingencies.

        Assuming all equity incentive awards vest and tender into the offer, the Offeror estimates the amounts required to purchase the outstanding shares will be approximately $21.0 billion, including $12.2 billion of cash, plus related fees and expenses. AbbVie has entered into a 364-Day Bridge Term Loan Credit Agreement (the "bridge loan agreement") with the various financial institutions named therein, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent for the lenders. The bridge loan agreement provides for an $18.0 billion term facility under which, subject to the satisfaction of certain conditions, AbbVie may request up to two borrowings: (i) one in an amount up to $18.0 billion on the first date on which the offer is consummated and the conditions to funding of the bridge loan agreement have been satisfied (the "bridge closing date") and (ii) one on any date within 60 days after the bridge closing date in an amount up to the lesser of $6.0 billion and the amount of the $18.0 billion commitment remaining after the initial borrowing.

        AbbVie may use the proceeds of any borrowings under the bridge loan agreement to finance, among other things, the acquisition of Pharmacyclics pursuant to the merger agreement and payment of related fees and expenses, the repurchase of AbbVie common stock in connection with the acquisition of Pharmacyclics, and certain other permitted uses. Loans under the bridge loan agreement mature 364 days after the bridge closing date.

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        AbbVie's borrowings under the bridge loan agreement will bear interest, at AbbVie's option, based on either a base rate or a Eurocurrency (or LIBOR) rate. The base rate is equal to the highest of (i) the federal funds rate plus 0.50%, (ii) the rate of interest per annum from time to time published in the "Money Rates" section of The Wall Street Journal as being the "Prime Lending Rate" and (iii) the one-month Eurocurrency rate plus 1.00%. The margins on both base rate loans and Eurocurrency loans will increase at specified dates in accordance with the terms of the bridge loan agreement.

        The bridge loan agreement contains customary representations, warranties and affirmative and negative covenants, including a financial covenant limiting AbbVie's ratio of Consolidated Total Debt to Consolidated EBITDA to certain ratios on certain dates. AbbVie currently expects to finance the offer and the merger on a permanent basis with a combination of the issuance and/or arrangement of new debt and available cash, including pursuant to underwritten notes offerings of AbbVie.

Support Agreement

        Simultaneously with the execution and delivery of the merger agreement, Robert W. Duggan, the chairman and chief executive officer of Pharmacyclics, entered into a support agreement with AbbVie and the Offeror (which we refer to as the "support agreement"), pursuant to which Mr. Duggan has agreed, among other things, (1) to tender his shares into the offer and (2) to cause certain Pharmacyclics stockholders affiliated with Mr. Duggan to tender their respective Pharmacyclics shares into the offer. Mr. Duggan and the affiliated Pharmacyclics stockholders subject to the support agreement collectively currently own approximately 17.3% of the outstanding shares. The support agreement terminates automatically upon the termination of the merger agreement.

Fees and Expenses

        AbbVie has retained Georgeson Inc. as information agent in connection with the offer. The information agent may contact holders of shares by mail, email, telephone, facsimile and personal interview and may request brokers, dealers and other nominee stockholders to forward material relating to the offer to beneficial owners of shares. AbbVie will pay the information agent reasonable and customary compensation for these services in addition to reimbursing the information agent for its reasonable out-of-pocket expenses. AbbVie agreed to indemnify the information agent against certain liabilities and expenses in connection with the offer, including certain liabilities under the U.S. federal securities laws.

        In addition, AbbVie has retained Computershare as exchange agent in connection with the offer and the merger. AbbVie will pay the exchange agent reasonable and customary compensation for its services in connection with the offer, will reimburse the exchange agent for its reasonable out-of-pocket expenses and will indemnify the exchange agent against certain liabilities and expenses, including certain liabilities under the U.S. federal securities laws.

        AbbVie will reimburse brokers, dealers, commercial banks and trust companies and other nominees, upon request, for customary clerical and mailing expenses incurred by them in forwarding offering materials to their customers. Except as set forth above, neither AbbVie nor the Offeror will pay any fees or commissions to any broker, dealer or other person for soliciting tenders of shares pursuant to the offer.

Accounting Treatment

        In accordance with accounting principles generally accepted in the United States, AbbVie will account for the acquisition of shares through the transaction under the acquisition method of accounting for business combinations.

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Stock Exchange Listing

        Shares of AbbVie common stock are listed on the NYSE. AbbVie intends to submit a supplemental listing application to list on the NYSE the shares of AbbVie common stock that AbbVie will issue in the offer and the merger.

Resale of AbbVie Common Stock

        All AbbVie common stock received by Pharmacyclics stockholders as consideration in the offer and the merger will be freely tradable for purposes of the Securities Act, except for AbbVie common stock received by any person who is deemed an "affiliate" of AbbVie at the time of the closing of the merger. AbbVie common stock held by an affiliate of AbbVie may be resold or otherwise transferred without registration in compliance with the volume limitations, manner of sale requirements, notice requirements and other requirements under Rule 144 or as otherwise permitted under the Securities Act. This document does not cover resales of AbbVie common stock received upon completion of the merger by any person, and no person is authorized to make any use of this document in connection with any resale.

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MERGER AGREEMENT

        The following summary describes certain material provisions of the merger agreement entered into by AbbVie, the Offeror, Merger Sub 2 and Pharmacyclics, a copy of which is attached hereto as Annex A. This summary may not contain all of the information about the merger agreement that is important to Pharmacyclics stockholders, and Pharmacyclics stockholders are encouraged to read the merger agreement carefully in its entirety. The legal rights and obligations of the parties are governed by the specific language of the merger agreement and not this summary.

The Offer

        The Offeror is offering to exchange for each outstanding Pharmacyclics share validly tendered and not properly withdrawn in the offer:

        We refer to the above as the "mixed consideration." In lieu of receiving the mixed consideration, holders of Pharmacyclics shares may elect to receive, for each Pharmacyclics share that they hold, (1) $261.25 in cash (we refer to this election as the "all-cash election" and this amount as the "all-cash consideration") or (2) a number of shares of AbbVie common stock equal to $261.25 divided by the volume weighted average sale price per share of AbbVie common stock as reported on the NYSE for the ten consecutive trading days ending on and including the second trading day prior to the final expiration date of the offer, as calculated by Bloomberg Financial LP under the function "ABBV UN Equity AQR" (we refer to this election as the "all-stock election" and this amount as the "all-stock consideration").

        See "The Offer—Elections and Proration" for a detailed description of the proration procedures applicable to the offer.

        The Offeror's obligation to accept for exchange and to exchange Pharmacyclics shares validly tendered and not properly withdrawn in the offer is subject to the satisfaction or waiver by the Offeror of certain conditions, including the valid tender of at least a majority of the Pharmacyclics shares outstanding as of the expiration of the offer (including any Pharmacyclics shares then owned by AbbVie and its subsidiaries), as more fully described under "The Offer—Conditions of the Offer."

        Under the merger agreement, and subject to the outside date of the merger agreement, unless Pharmacyclics consents otherwise or the merger agreement is otherwise terminated, the Offeror must extend the offer:

        The merger agreement may be terminated by either AbbVie or Pharmacyclics if the acceptance for exchange of Pharmacyclics shares tendered in the offer has not occurred by midnight, Pacific time, on

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September 4, 2015, the outside date of the merger agreement (except that such date may be extended by either AbbVie or Pharmacyclics to December 3, 2015 if certain regulatory conditions to the offer have not been satisfied by September 4, 2015). The Offeror will not be required to extend the offer beyond the termination of the merger agreement.

        For a more complete description of the offer, see "The Offer."

The Merger

        The merger agreement provides that, if the offer is completed, the parties will effect the merger of the Offeror with and into Pharmacyclics, with Pharmacyclics continuing as the surviving corporation in the first merger, followed by the merger of Pharmacyclics with and into Merger Sub 2. As a result of the second merger, Pharmacyclics will cease to exist and Merger Sub 2 will continue as the surviving company in the merger, under the name Pharmacyclics. After the first merger, the surviving company will be a direct wholly owned subsidiary of AbbVie, and the former Pharmacyclics stockholders will not have any direct equity ownership interest in the surviving entity.

Completion and Effectiveness of the Merger

        Under the merger agreement, the closing of the merger must occur as soon as practicable after the acceptance of tendered Pharmacyclics shares in the offer, and in any case no later than the second business day after satisfaction or permitted waiver of the conditions to closing of the merger, unless the parties agree otherwise in writing (see "Merger Agreement—Conditions to the Merger"). The merger will become effective upon the issuance of certificates of merger by the Secretary of State of the State of Delaware unless a later date is specified therein. The first merger (the merger of the Offeror with and into Pharmacyclics) must precede the second merger (the merger of Pharmacyclics with and into Merger Sub 2).

Merger Consideration

        In the merger, Pharmacyclics stockholders will have the opportunity to elect to receive the mixed consideration, the all-cash consideration or the all-stock consideration, subject to proration of the all-cash consideration or the all-stock consideration.

        Pharmacyclics stockholders electing the mixed consideration will not be subject to proration; however, holders electing the all-cash consideration or the all-stock consideration may receive a different form of consideration than selected. Pharmacyclics stockholders electing either the all-cash consideration or the all-stock consideration will be subject to proration in order to ensure that approximately 58.3% of the aggregate consideration in the first merger will be paid in cash and approximately 41.7% of the aggregate consideration in the first merger will be paid in AbbVie common stock. Further proration may be required to ensure the satisfaction of the condition related to the receipt of an opinion by each of AbbVie and Pharmacyclics from their respective legal counsel to the effect that the offer and the merger, taken together, will qualify as a "reorganization" within the meaning of Section 368(a) of the Code. Pharmacyclics stockholders who otherwise would be entitled to receive a fractional share of AbbVie common stock will instead receive an amount in cash (without interest) equal to the amount of such fraction multiplied by the volume weighted average sale price per share of AbbVie common stock as reported on the NYSE for the ten consecutive trading days ending on and including the second trading day prior to the final expiration date of the offer, as calculated by Bloomberg Financial LP under the function "ABBV UN AQR".

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        The number of Pharmacyclics shares that will receive the all-cash consideration in the merger will be equal to 58.3% of the aggregate number of Pharmacyclics shares entitled to receive the consideration in the merger (excluding shares electing to receive the mixed consideration and shares for which no election is made). The number of Pharmacyclics shares that will receive the all-stock consideration in the merger will be equal to 41.7% of the aggregate number of Pharmacyclics shares entitled to receive the consideration in the merger (excluding shares electing to receive the mixed consideration and shares for which no election is made).

        If the number of validly tendered and not properly withdrawn Pharmacyclics shares making an all-cash election in the merger is greater than the number of Pharmacyclics shares to receive the all-cash consideration in the merger as calculated above, such shares will be subject to proration. If proration applies to the Pharmacyclics shares making an all-cash election in the merger, the percentage of Pharmacyclics shares making an all-cash election in the merger that will receive the all-cash consideration will be equal to the following:

All such prorations will be applied on a pro rata basis, such that each Pharmacyclics stockholder who makes an all-cash election in the merger bears its proportionate share of the proration. If proration applies to the Pharmacyclics shares that have made an all-cash election, the shares that do not receive the all-cash consideration due to proration will receive the all-stock consideration.

        If the number of validly tendered and not properly withdrawn Pharmacyclics shares making an all-stock election in the merger is greater than the number of Pharmacyclics shares to receive the all-stock consideration in the merger as calculated above, such shares will be subject to proration. If proration applies to the Pharmacyclics shares making an all-stock election in the merger, the percentage of Pharmacyclics shares making an all-stock election in the merger that will receive the all-stock consideration will be equal to the following:

All such prorations will be applied on a pro rata basis, such that each Pharmacyclics stockholder who makes an all-stock election in the merger bears its proportionate share of the proration. If proration applies to the Pharmacyclics shares that have made an all-stock election, the shares that do not receive the all-stock consideration due to proration will receive the all-cash consideration.

        See "Risk Factors—Pharmacyclics stockholders may not receive all consideration in the form elected."

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        Pharmacyclics stockholders with shares to be converted into the merger consideration in the merger who do not make an election will be deemed to have elected to receive the mixed consideration.

        No appraisal rights are available to the holders of Pharmacyclics shares in connection with the offer. However, if the merger is consummated, the holders of Pharmacyclics shares immediately prior to the effective time of the first merger who (1) did not tender Pharmacyclics shares in the offer; (2) follow the procedures set forth in Section 262 of the DGCL; and (3) do not thereafter withdraw their demand for appraisal of such shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to have their Pharmacyclics shares appraised by the Delaware Court of Chancery and receive payment of the "fair value" of such shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, as determined by such court.

        The "fair value" of any Pharmacyclics shares could be based upon considerations other than, or in addition to, the price paid in the offer and the market value of such shares. Pharmacyclics stockholders of shares should recognize that the value so determined could be higher or lower than, or the same as, the consideration payable in the offer and the merger. Moreover, AbbVie and Pharmacyclics may argue in an appraisal proceeding that, for purposes of such proceeding, the fair value of such shares is less than such amount.

        Under Section 262 of the DGCL, where a merger is approved under Section 251(h) of the DGCL, either a constituent corporation before the effective date of the merger, or the surviving corporation within ten days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and will include in such notice a copy of Section 262 of the DGCL.

        The Schedule 14D-9 constitutes the formal notice of appraisal rights under Section 262 of the DGCL.

        As described more fully in the Schedule 14D-9, if a Pharmacyclics stockholder elects to exercise appraisal rights under Section 262 of the DGCL, such Pharmacyclics stockholder must do all of the following:

        This does not purport to be a complete statement of the procedures to be followed by Pharmacyclics stockholders desiring to exercise any appraisal rights and is qualified in its entirety by reference to Section 262 of the DGCL. The proper exercise of appraisal rights requires strict and timely adherence to the applicable provisions of Delaware law. A copy of Section 262 of the DGCL is included as Annex C to the Schedule 14D-9.

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Exchange of Pharmacyclics Stock Certificates for the Merger Consideration

        AbbVie has retained Computershare Trust Company, N.A. as the depositary and exchange agent for the offer and the merger (the "exchange agent") to handle the exchange of Pharmacyclics shares for the offer consideration and the merger consideration, as applicable.

        To effect the exchange of Pharmacyclics shares, promptly after the effective time of the merger, the exchange agent will mail to each record holder of Pharmacyclics shares a form of election and instructions for surrendering the stock certificates that formerly represented shares for the merger consideration. After surrender to the exchange agent of certificates that formerly represented Pharmacyclics shares for cancellation, together with an executed form of election, the record holder of the surrendered certificates will be entitled to receive the merger consideration.

        After the effective time of the merger, each stock certificate formerly representing Pharmacyclics shares that has not been surrendered will represent only the right to receive upon such surrender the merger consideration to which such holder is entitled by virtue of the merger and any dividends or other distributions payable to such holder upon such surrender.

Fractional Shares

        AbbVie will not issue fractional shares of AbbVie common stock in the offer or the merger. Instead, each holder of Pharmacyclics shares who otherwise would be entitled to receive fractional shares of AbbVie common stock will be entitled to an amount of cash (without interest) equal to an amount in cash (without interest) equal to such fractional part of a share of AbbVie common stock multiplied by the volume weighted average sale price per share of AbbVie common stock as reported on the NYSE for the ten consecutive trading days ending on and including the second trading day prior to the final expiration date of the offer.

Conditions to the Merger

        The respective obligations of Pharmacyclics, AbbVie, Merger Sub 2 and the Offeror to complete the merger under the merger agreement are subject to the satisfaction or waiver of the following conditions:

Representations and Warranties

        The merger agreement contains customary representations and warranties of the parties. These include representations and warranties of Pharmacyclics with respect to:

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        The merger agreement also contains customary representations and warranties of AbbVie, Merger Sub 2 and the Offeror, including among other things:

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        The representations and warranties contained in the merger agreement expire at the effective time of the merger. The representations, warranties and covenants made by Pharmacyclics in the merger agreement are qualified by information contained in the disclosure schedules delivered to AbbVie, Merger Sub 2 and the Offeror in connection with the execution of the merger agreement. The representations, warranties and covenants made by AbbVie, Merger Sub 2 and the Offeror in the merger agreement are qualified by information contained in the disclosure schedules delivered to Pharmacyclics in connection with the execution of the merger agreement. Stockholders are not third-party beneficiaries of these representations and warranties under the merger agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Pharmacyclics or any of its affiliates or of AbbVie or any of its affiliates.

No Solicitation of Other Offers by Pharmacyclics

        Under the terms of the merger agreement, subject to certain exceptions described below, Pharmacyclics has agreed that, from the date of the merger agreement until the earlier of the acceptance time or the date the merger agreement is terminated, it and its subsidiaries will not, and Pharmacyclics will not authorize or knowingly permit its directors, officers, employees and other representatives to (and will use its reasonable best efforts to cause the foregoing persons not to), directly or indirectly:

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        In addition, under the merger agreement, Pharmacyclics has agreed that it will:

        Under the merger agreement, Pharmacyclics is obligated to notify AbbVie within 24 hours after receiving any acquisition proposal, any inquiry that would reasonably be expected to lead to an acquisition proposal, or any inquiry or request for non-public information relating to Pharmacyclics or any subsidiary by any person who has made or would reasonably be expected to make any acquisition proposal. The notice must include the identity of the person making the proposal, inquiry or request, the material terms and conditions of any such proposal or offer, and the nature of the information requested pursuant to any such inquiry or request, including copies of all written requests, proposals or offers (including any proposed agreements received by Pharmacyclics). Pharmacyclics also must keep AbbVie informed, on a prompt and timely basis, of the status and material terms of any such acquisition proposal or potential proposal (including any amendments), or of the nature of any information requested. Pharmacyclics also must promptly provide AbbVie with any material non-public information concerning Pharmacyclics provided to any other person in connection with any acquisition proposal that was not previously provided to AbbVie.

        Notwithstanding the prohibitions described above, if Pharmacyclics receives an unsolicited written acquisition proposal that did not result from a breach of Pharmacyclics' non-solicitation obligations, Pharmacyclics is permitted to furnish non-public information to such person and engage in discussions or negotiations with such person with respect to the acquisition proposal, as long as:

        An "acquisition proposal" for purposes of the merger agreement means any offer, proposal or indication of interest from any person or group (other than AbbVie or a subsidiary of AbbVie) relating to any transaction or series of related transactions involving:

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        A "superior proposal" for purposes of the merger agreement means any acquisition proposal which the Pharmacyclics board of directors determines in good faith (after consultation with Pharmacyclics' outside legal counsel and financial advisors) to be more favorable to the Pharmacyclics' stockholders than the offer and the merger, (taking into account all relevant factors, including the terms and conditions of the proposal and the merger agreement, as well as any changes to the terms of the merger agreement proposed by AbbVie in response to any acquisition proposal). When determining whether an offer constitutes a superior proposal, references in the term "acquisition proposal" to "20%" or "80%" will be deemed to be references to "50%."

Change of Recommendation

        The merger agreement requires the Pharmacyclics board of directors to recommend that Pharmacyclics stockholders tender their Pharmacyclics shares into the offer. Other than as described below (any of the following being a "change in recommendation"), the Pharmacyclics board of directors may not:

        Notwithstanding the foregoing, the Pharmacyclics board of directors may take such actions if, prior to the Acceptance Time:

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        The "acceptance time" for purposes of the merger agreement is the time that AbbVie will accept for payment, and pay for, all Pharmacyclics shares that are validly tendered and not properly withdrawn in the offer promptly after the expiration of the offer (as it may be extended pursuant to the terms of the merger agreement).

        Prior to making a change in recommendation for any reason set forth above, Pharmacyclics must give AbbVie three business days prior written notice of its intent to make a change in recommendation. The notice must specify in reasonable detail the reasons for any change in recommendation due to an intervening event (as defined below), or the material terms and conditions of the acquisition proposal for any change in recommendation due to a superior proposal. In each case, Pharmacyclics must negotiate in good faith, and cause its representatives to negotiate in good faith, any proposal from AbbVie to amend the merger agreement in a way that would eliminate the need to make a change in recommendation, and the Pharmacyclics board of directors must make the required determination regarding its fiduciary duties again at the end of such three business day negotiation period. With respect to any change in recommendation due to a superior proposal, Pharmacyclics must give a new notice to AbbVie and continue to negotiate in good faith for an additional two business day period with respect to any revised terms proposed by AbbVie.

        In addition to these requirements, Pharmacyclics may make a change in recommendation with respect to a superior proposal only if the Pharmacyclics board of directors also terminates the merger agreement in order to enter into a definitive agreement with respect to the superior proposal.

        An "intervening event" for purposes of the merger agreement is an event, fact, development or occurrence that does not result from a material breach of the merger agreement by Pharmacyclics, and that was not known to the Pharmacyclics board of directors on the date of the merger agreement and becomes known to them prior to the time that Pharmacyclics shares are accepted for exchange in the offer. The receipt, existence or terms of an acquisition proposal, or any matter relating to, or consequence of, an acquisition proposal, is not an intervening event.

        Nothing in the merger agreement prohibits Pharmacyclics or the Pharmacyclics board of directors from taking and disclosing to the Pharmacyclics stockholders anything contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act (or any substantially similar communication in connection with an acquisition proposal that is not a tender offer), or making any other disclosure if the Pharmacyclics board of directors has reasonably determined in good faith (after consultation with Pharmacyclics' outside legal counsel) that the failure to make such disclosure would be inconsistent with the directors' duties under applicable law (in each case if such disclosure is not a change in recommendation, except to the extent a change of recommendation is permitted as described above).

Conduct of Business Before Completion of the Merger

        The merger agreement provides for certain restrictions on Pharmacyclics' and its subsidiaries' activities until either the completion of the merger or the termination of the merger agreement. In general, Pharmacyclics is required to conduct its business in all material respects in the ordinary course consistent with past practice, including by using commercially reasonable efforts to preserve its present business organizations and its present relationships with customers, suppliers, governmental entities, and other people with which they have material business relationships. In addition, unless specifically permitted by the merger agreement or otherwise approved in writing by AbbVie (which approval may not be unreasonably withheld, conditioned or delayed), none of Pharmacyclics nor any Pharmacyclics subsidiary may, among other things:

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        The merger agreement provides for certain restrictions on AbbVie's and its subsidiaries' activities until either the completion of the merger or the termination of the merger agreement. Unless otherwise approved in writing by Pharmacyclics (which approval may not be unreasonably withheld, delayed or conditioned), AbbVie and its subsidiaries may not, among other things:

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Pharmacyclics and IMBRUVICA® (ibrutinib) Names

        For five years after the closing of the merger, AbbVie has agreed to maintain the name of the surviving company in the merger as "Pharmacyclics" and to maintain such entity as the primary operating entity which owns and markets IMBRUVICA® (ibrutinib) in the United States (provided that AbbVie may substitute another entity for the surviving company in order to facilitate certain internal planning and management). For the same period, AbbVie has agreed to market IMBRUVICA® (ibrutinib) under the IMBRUVICA® (ibrutinib) trade name, and to display such name in greater size and prominence than other AbbVie trade names on such products, and to display the IMBRUVICA® (ibrutinib) trade name on all packaging materials, labels and promotional materials relating to IMBRUVICA® (ibrutinib). AbbVie's obligations pursuant to the merger agreement will not restrict the taking of any actions reasonably required in order to comply with applicable law or agreements in effect as of the date of the merger agreement, or necessary in the reasonable judgment of AbbVie's board of directors to exercise its fiduciary duties. Holders or "groups" (as defined in Section 13(d)(3) of the Exchange Act) of holders of Pharmacyclics shares who beneficially owned 15% or more of the outstanding Pharmacyclics shares as of immediately prior to the acceptance of Pharmacyclics shares for exchange in the offer are express third party beneficiaries of these agreements.

Access

        The merger agreement provides that during the period prior to the effective time of the first merger, Pharmacyclics and AbbVie will give each other and each other's representatives reasonable access during normal business hours and upon reasonable advance notice to all of their respective properties, offices, books and records, and will furnish promptly to the other party all information concerning their business, properties and personnel as the other party reasonably requests. However, neither party is required to disclose information that may not be disclosed pursuant to contractual or legal restrictions, provided that the disclosing party will use commercially reasonable efforts to make alternative arrangements for disclosure that do not violate such restrictions.

Additional Agreements

        Under the merger agreement, AbbVie and Pharmacyclics are required to use reasonable best efforts to:

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Treatment of Pharmacyclics Equity Awards; Employee Stock Purchase Plan

        Each option and Pharmacyclics restricted stock unit that is outstanding as of immediately prior to the effective time of the first merger and that is subject to performance-based vesting conditions will become fully vested at such time, with all applicable performance goals deemed achieved at target levels. Each Pharmacyclics option or RSU, whether vested or unvested, that is outstanding as of the effective time of the first merger will be cancelled and converted into the right to receive a cash amount equal to the product of (1) the total number of Pharmacyclics shares subject to such option or RSU and (2) (A) in the case of an RSU, the all-cash consideration, or (B) in the case of an option, the excess, if any, of the all-cash consideration over the per-share exercise price of such option (referred to as the "equity consideration"). The portion of the equity consideration that relates to an option or RSU that is outstanding and vested as of immediately prior to the effective time of the first merger will be paid to the holder of the applicable option or RSU (less applicable taxes) in a lump sum promptly following the completion of the merger. The portion of the equity consideration that relates to an option or RSU that is outstanding and unvested as of the effective time of the first merger will be paid to the holder of the applicable option or RSU (without interest and less applicable taxes), contingent on the holder's continued service with AbbVie or its subsidiaries through such date (subject to certain exceptions in the event of severance-qualifying terminations of employment or the holder's death), on the earlier of (x) the original vesting date of such option or RSU, or (y) December 31 of the year in which the completion of the merger occurs. Upon such severance-qualifying terminations of employment or the holder's death, any unpaid portion of the Award Cash Payment will become immediately payable in a lump sum.

        Prior to the time that Pharmacyclics shares are accepted for exchange in the offer, Pharmacyclics' Employee Stock Purchase Plan (referred to as the "ESPP"), and each outstanding offering period then in progress thereunder, will terminate and each participant's accumulated contributions to the ESPP will be used to purchase Pharmacyclics shares as of such time in accordance with the terms of the ESPP (and any funds that remain in participants' account after such purchase will be returned to the applicable participants). No one may elect to participate in the ESPP after March 4, 2015 and no participant as of March 4, 2015 may increase his or her payroll deduction percentages or purchase elections after March 4, 2015. No new offerings in the ESPP will be made after March 4, 2015.

Employee Matters

        AbbVie has agreed under the merger agreement to assume, or to cause to be assumed, Pharmacyclics' employee benefit plans in accordance with their terms and subject to the other terms of

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the merger agreement. AbbVie has also agreed that for two years following the effective time of the first merger, AbbVie will provide, or cause to be provided, to each Pharmacyclics employee who continues to be employed by AbbVie or its subsidiaries (1) cash compensation opportunities (but not equity-based compensation) that are no less favorable in the aggregate to such employee as the cash compensation opportunities provided to such employee immediately prior to the time that Pharmacyclics shares were accepted for exchange in the offer, and (2) employee benefits that are substantially comparable in the aggregate to the employee benefits provided to such employee immediately prior to the time that Pharmacyclics shares were accepted for exchange in the offer. AbbVie also has agreed to recognize years of service with Pharmacyclics or its subsidiaries under most employee benefit plans to the extent such service would have been recognized under a corresponding Pharmacyclics employee benefit plan, including for vacation and 401(k) and other retirement plans, except for purposes of determining any accrued benefit under any defined benefit pension plan, eligibility for retirement under an equity-based compensation plan, eligibility for any retiree health plans operated by AbbVie, or to the extent that any such recognition would result in a duplication of benefits.

        Pharmacyclics will terminate its 401(k) plan(s) as of the day immediately preceding the effective time of the first merger if AbbVie provides timely, written notice requesting such termination in accordance with the merger agreement.

Directors' and Officers' Indemnification

        Under the merger agreement, for a period of six years after the effective time of the first merger, AbbVie must cause the surviving company in the merger to indemnify and hold harmless, to the fullest extent required or permitted under applicable law, each current and former director, officer and employee of Pharmacyclics and its subsidiaries against costs and expenses in connection with claims asserted or claimed prior to, at or after the effective time of the first merger, in respect of acts or omissions occurring or alleged to have occurred at or prior to the effective time of the first merger, based on or arising out of the fact that such person is or was such an officer, director or employee or other fiduciary of Pharmacyclics. In addition, for a period of six years following the effective time of the first merger, the surviving company in the merger may not amend, modify or repeal any provision of the surviving company's organizational documents in any manner that would adversely affect the rights or protections thereunder of any current and former director, officer or employee of Pharmacyclics in respect of acts or omissions occurring at or prior to the effective time of the first merger.

        For six years after the effective time of the first merger, the surviving company must provide current directors and officers an insurance and indemnification policy that provides coverage for events occurring prior to the effective time of the first merger that is no less favorable than Pharmacyclics' existing policy or, if insurance coverage that is no less favorable is unavailable, the best available coverage, provided that the surviving company is not required to pay annual premiums in excess of 300% of the last annual premium paid by Pharmacyclics prior to the date of the merger agreement.

        Under the merger agreement, instead of the insurance described above, Pharmacyclics may purchase a directors' and officers' liability insurance "tail" insurance program for a period of six years after the effective time of the first merger with respect to acts or omissions committed at or prior to the effective time of the first merger, with an annual cost not in excess of 300% of the last annual premium paid by Pharmacyclics prior to the date of the merger agreement.

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Termination of the Merger Agreement

        The merger agreement may be terminated at any time before the time that Pharmacyclics shares are accepted for exchange in the offer:

        Pharmacyclics may terminate the merger agreement if:

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        Under the merger agreement, AbbVie may terminate the merger agreement if:

        A "material adverse effect" with respect to either AbbVie or Pharmacyclics means any change, effect, development, circumstance, condition, state of facts, event or occurrence that, individually or in the aggregate, has a material adverse effect on the condition (financial or otherwise), business, assets or operations of such party and its subsidiaries, taken as a whole (or, in the case of Pharmacyclics, on Pharmacyclics' assets associated with IMBRUVICA® (ibrutinib)); provided, however, that no such change, effect, development, circumstance, condition, state of facts, event or occurrence resulting or arising from any of the following will be deemed to constitute a material adverse effect or will be taken into account when determining whether a material adverse effect exists or has occurred or is reasonably likely to exist or occur:

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provided that with respect to the exceptions in clauses (a), (b), (c), (d), (e) and (h), the exclusion will not apply to the extent such party is materially and disproportionately affected relative to other participants in the industry in which such party operates.

Termination Fee and Expenses

        Except as set forth below, all fees and expenses incurred in connection with the merger agreement, the offer, and the merger will be paid by the party incurring the fee or expense.

        The merger agreement provides that Pharmacyclics will pay AbbVie a termination fee of $680 million if:

        In no event will Pharmacyclics be obligated to pay the termination fee on more than one occasion. Additionally, AbbVie and Pharmacyclics acknowledge in the merger agreement that the termination fee is not a penalty, but rather is liquidated damages in a reasonable amount that will compensate AbbVie in the circumstances in which the termination fee is payable for the efforts and resources expended and opportunities foregone while negotiating the merger agreement and in reliance on the merger agreement and on the expectation of the consummation of the transactions contemplated by the merger agreement. In the event that the termination fee is payable and Pharmacyclics pays AbbVie the termination fee, none of Pharmacyclics, any of its subsidiaries, any of their respective former, current or future officers, directors, partners, stockholders, managers, members, affiliates or agents will have any further liability or obligation relating to or arising out of the merger agreement or the transactions contemplated by the merger agreement.

Effect of Termination

        In the event of termination of the merger agreement prior to the effective time of the merger in accordance with the terms of the merger agreement, the merger agreement will become void, and there will be no liability or further obligation on the part of AbbVie, the Offeror, Merger Sub 2 or Pharmacyclics, provided that no party will be relieved of liability for any willful breach of the merger agreement prior to such termination (which AbbVie and Pharmacyclics acknowledged and agreed in the merger agreement may include the benefit of the bargain lost by Pharmacyclics or its stockholders or AbbVie, as applicable).

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Amendments, Enforcements and Remedies, Extensions and Waivers

        The merger agreement may be amended by the parties at any time.

        Under the merger agreement, the parties have agreed that, prior to the valid termination of the merger agreement, each party will be entitled to:

        Under the merger agreement, at any time prior to the effective time of the first merger, any party may:

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COMPARATIVE MARKET PRICE AND DIVIDEND MATTERS

Market Price History

        AbbVie common stock is listed on the NYSE under the symbol "ABBV," and Pharmacyclics shares are listed on the NASDAQ under the symbol "PCYC." The following table sets forth, for the periods indicated, as reported by the NYSE with respect to AbbVie and the NASDAQ with respect to Pharmacyclics, the per share high and low sales prices of each company's common stock.

 
  AbbVie Common Stock   Pharmacyclics Shares  
 
  High   Low   Dividend   High   Low   Dividend  

2012

                                     

First Calendar Quarter

      (1)     (1)     (1) $ 29.43   $ 14.74      

Second Calendar Quarter

      (1)     (1)     (1) $ 55.43   $ 24.50      

Third Calendar Quarter

      (1)     (1)     (1) $ 70.48   $ 48.50      

Fourth Calendar Quarter

      (1)     (1)     (1) $ 70.24   $ 44.91      

2013

                                     

First Calendar Quarter

  $ 40.80   $ 33.33   $ 0.80   $ 95.85   $ 59.45      

Second Calendar Quarter

  $ 48.00   $ 39.96   $ 0.40   $ 93.67   $ 71.85      

Third Calendar Quarter

  $ 48.42   $ 41.07   $ 0.40   $ 140.45   $ 80.88      

Fourth Calendar Quarter

  $ 54.78   $ 44.32   $ 0.40   $ 143.34   $ 97.01      

2014

                                     

First Calendar Quarter

  $ 54.73   $ 46.42   $ 0.42   $ 154.89   $ 99.03      

Second Calendar Quarter

  $ 56.90   $ 45.50   $ 0.42   $ 110.50   $ 82.51      

Third Calendar Quarter

  $ 60.02   $ 51.37   $ 0.42   $ 129.16   $ 88.45      

Fourth Calendar Quarter

  $ 70.76   $ 52.06   $ 0.49   $ 145.41   $ 101.25      

2015

                                     

First Calendar Quarter

  $ 68.29   $ 54.78   $ 0.51   $ 258.95   $ 117.01      

Second Calendar Quarter (through April 16, 2015)

  $ 62.91   $ 56.33       $ 260.47   $ 254.64      

(1)
AbbVie common stock began trading on the NYSE on January 2, 2013.

        On February 24, 2015, the trading day prior to public reports that Pharmacyclics was exploring options, including a sale of the company, the closing price per Pharmacyclics share on the NASDAQ was $188.45, and the closing price per share of AbbVie common stock on the NYSE was $60.87. On March 4, 2015, the trading day before the public announcement of the execution of the merger agreement, the closing price per Pharmacyclics share on the NASDAQ was $230.48, and the closing price per share of AbbVie common stock on the NYSE was $60.27. On April 16, 2015, the most recent trading date prior to the filing of this document, the closing price per Pharmacyclics share on the NASDAQ was $258.02, and the closing price per share of AbbVie common stock on the NYSE was $62.59. Pharmacyclics stockholders should obtain current market quotations for Pharmacyclics shares and shares of AbbVie common stock before deciding whether to tender their Pharmacyclics shares in the offer and before electing the form of offer consideration they wish to receive.

Dividends

        The timing, declaration, amount of, and payment of any dividends by AbbVie is within the discretion of the AbbVie board of directors and will depend upon many factors, including AbbVie's financial condition, earnings, capital requirements of its operating subsidiaries, covenants associated with certain of AbbVie's debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets, and other factors deemed relevant by the AbbVie board of directors.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

        The following unaudited pro forma condensed combined financial statements have been prepared to reflect the acquisition of Pharmacyclics by AbbVie. The unaudited pro forma condensed combined balance sheet combines the historical consolidated balance sheets of AbbVie and Pharmacyclics as of December 31, 2014, giving effect to the merger as if it had occurred on December 31, 2014. The unaudited pro forma condensed combined statement of earnings combines the historical statements of earnings of AbbVie and Pharmacyclics for the year ended December 31, 2014, giving effect to the merger as if it had occurred on January 1, 2014. The historical consolidated financial information has been adjusted to reflect factually supportable items that are directly attributable to the acquisition and, with respect to the statement of income only, expected to have a continuing impact on the combined results.

        The pro forma financial statements have been prepared using the acquisition method of accounting for business combinations under accounting principles generally accepted in the United States, with AbbVie treated as the acquirer. The acquisition method of accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measure. Accordingly, the pro forma adjustments are preliminary, have been made solely for the purpose of providing pro forma financial statements, and are subject to revision based on a final determination of fair value as of the date of acquisition. Differences between these preliminary estimates and the final acquisition accounting may have a material impact on the accompanying pro forma financial statements and AbbVie's future results of operations and financial position.

        The pro forma financial statements do not give effect to the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies, or any other synergies that may result from the merger.

        The pro forma financial statements are provided for informational purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of AbbVie would have been had the combination occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position. The pro forma financial statements should be read in conjunction with the accompanying notes to the pro forma financial statements and the audited consolidated financial statements and accompanying notes of AbbVie and Pharmacyclics contained in their respective Annual Reports on Form 10-K for the year ended December 31, 2014, incorporated by reference herein.

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AbbVie Unaudited Pro Forma Condensed Combined Balance Sheet

As of December 31, 2014

 
  Historical    
   
   
   
   
 
(in millions)
  AbbVie   Pharmacyclics
after
reclassifications
(Note 4)
  Acquisition
adjustments
  Note
reference
  Financing
adjustments
  Note
reference
  Pro
forma
combined
 

Assets

                                       

Current assets

                                       

Cash and equivalents

  $ 8,348   $ 845   $ (12,419 ) 5b   $ 11,800   5m   $ 8,054  

                (94 ) 5c     (129 ) 5n        

                (70 ) 5i                  

                (227 ) 5l                  

Short-term investments

    26     12                     38  

Accounts and other receivables, net

    3,735     64                     3,799  

Inventories, net

    1,124     35     496   5d             1,655  

Income tax receivable

    556                         556  

Deferred income taxes

    896         (120 ) 5h             776  

Prepaid expenses and other

    1,403     60             129   5n     1,592  

Total current assets

    16,088     1,016     (12,434 )       11,800         16,470  

Investments

    92                         92  

Property and equipment, net

    2,485     32                     2,517  

Intangible assets, net of amortization

    1,513     9     18,891   5e             20,413  

Goodwill

    5,862         5,204   5j             11,066  

Other assets

    1,507     3     (415 ) 5h             1,095  

Total assets

  $ 27,547   $ 1,060   $ 11,246       $ 11,800       $ 51,653  

Liabilities and Equity

                                       

Current liabilities

                                       

Short-term borrowings

  $ 425   $   $       $       $ 425  

Current portion of long-term debt and lease bligations

    4,021                         4,021  

Accounts payable and accrued liabilities

    6,954     194     (12 ) 5f             7,262  

                138   5g                  

                (12 ) 5i                  

Total current liabilities

    11,400     194     114                 11,708  

Long-term liabilities

    3,840     37     (35 ) 5f             7,781  

                (49 ) 5l                  

                3,988   5h                  

Long-term debt and lease obligations

    10,565                 11,800   5m     22,365  

Commitments and contingencies

                                       

Stockholders' equity

                                       

Common stock

    16         1   5a             17  

Common stock held in treasury, at cost

    (972 )                       (972 )

Additional paid-in-capital

    4,194     960     (960 ) 5k             12,486  

                8,292   5a                  

Retained earnings

    535     (131 )   131   5k             299  

                (58 ) 5i                  

                (178 ) 5l                  

Accumulated other comprehensive loss

    (2,031 )                       (2,031 )

Total stockholders' equity

    1,742     829     7,228                 9,799  

Total liabilities and equity

  $ 27,547   $ 1,060   $ 11,246       $ 11,800       $ 51,653  

   

See the accompanying notes to the unaudited pro forma condensed combined financial statements.

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AbbVie Unaudited Pro Forma Condensed Combined Statement of Earnings

For the Year Ended December 31, 2014

 
  Historical    
   
   
   
   
 
(in millions, except share data)
  AbbVie   Pharmacyclics
after
reclassifications
(Note 4)
  Acquisition
adjustments
  Note
reference
  Financing
adjustments
  Note
reference
  Pro
forma
combined
 

Net sales

  $ 19,960   $ 730   $ (14 ) 6f   $       $ 20,676  

Cost of products sold

    4,426     267     187   6a             5,211  

                331   6d                  

Selling, general and administrative

    7,724     168     118   6e             8,010  

Research and development

    3,297     173                     3,470  

Acquired in-process research and development

    352                         352  

Other expense

    750                           750  

Total operating costs and expenses

    16,549     608     636                 17,793  

Operating earnings (losses)

    3,411     122     (650 )               2,883  

Interest expense, net

   
391
   
   
       
580
 

6b

   
971
 

Net foreign exchange loss

    678                         678  

Other income, net

    (27 )                       (27 )

Earnings (losses) before income tax expense (benefit)

    2,369     122     (650 )       (580 )       1,261  

Income tax expense (benefit)

    595     36     (224 ) 6c     (214 ) 6c     193  

Net earnings

  $ 1,774   $ 86   $ (426 )     $ (366 )     $ 1,068  

Per Share Data

                                       

Earnings per share

                                       

Basic

  $ 1.11                             $ 0.62  

Diluted

  $ 1.10                             $ 0.61  

Weighted-average shares outstanding

                                       

Basic

    1,595                               1,731  

Diluted

    1,610                               1,746  

   

See the accompanying notes to the unaudited pro forma condensed combined financial statements.

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Note 1—Description of the Transaction

        On March 4, 2015, AbbVie announced that it had entered into a definitive agreement to acquire all of the outstanding shares of Pharmacyclics pursuant to the offer and the merger. Through the Offeror, AbbVie is offering to acquire all of the outstanding Pharmacyclics shares, offering to exchange each outstanding Pharmacyclics share for (i) $152.25 in cash and $109.00 in fair market value of shares of AbbVie common stock, (ii) $261.25 in cash, or (iii) $261.25 in fair market value of AbbVie common stock at the election of each holder, subject to the election and proration procedures described in this document. Cash payments to Pharmacyclics equity award holders as a result of the transaction are not subject to the proration.

        AbbVie expects to fund the cash portion of the transaction with a combination of the issuance and/or arrangement of new debt and available cash. AbbVie has entered into a 364-Day Bridge Term Loan Credit Agreement (the "bridge loan agreement") with the various financial institutions named therein, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent for the lenders. The bridge loan agreement provides for an $18.0 billion term facility under which, subject to the satisfaction of certain conditions, AbbVie may request up to two borrowings: (i) one in an amount up to $18.0 billion on the first date on which the offer is consummated and the conditions to funding of the bridge loan agreement have been satisfied (the "bridge closing date") and (ii) one on any date within 60 days after the bridge closing date in an amount up to the lesser of $6.0 billion and the amount of the $18.0 billion commitment remaining after the initial borrowing.

        AbbVie currently expects to finance the offer and the merger on a permanent basis with a combination of the issuance and/or arrangement of new debt and available cash, including pursuant to underwritten notes offerings of AbbVie. The Offeror's obligation to accept for exchange, and to exchange, Pharmacyclics shares for cash and shares of AbbVie common stock in the offer is subject to a number of conditions, including that a majority of the outstanding Pharmacyclics shares have been validly tendered (and not properly withdrawn) in the offer and the receipt of the required regulatory approvals. The transaction is expected to be completed in mid-2015, subject to the satisfaction or waiver of the conditions to the closing.

Note 2—Basis of Presentation

        The unaudited pro forma condensed combined balance sheet gives effect to the acquisition of Pharmacyclics as if it occurred on December 31, 2014. The pro forma adjustments required to reflect the acquired assets and assumed liabilities of Pharmacyclics are based on the estimated fair value of Pharmacyclics' assets and liabilities as of December 31, 2014. The pro forma condensed combined statement of earnings for the year ended December 31, 2014 gives effect to the Pharmacyclics acquisition as if it occurred on January 1, 2014. The pro forma financial statements do not give effect to the any accelerated share repurchases, which AbbVie may enter into following the closing of the offer and the merger.

        The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of AbbVie and Pharmacyclics. The acquisition method of accounting, in accordance with ASC 805, "Business Combinations" (ASC 805) requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date, using the fair value concepts defined in ASC 820 "Fair Value Measurement" (ASC 820). The historical consolidated financial information has been adjusted in the accompanying unaudited pro forma combined financial information to give effect to pro forma events that are (i) directly attributable to the acquisition, (ii) factually supportable, and (iii) with respect to the unaudited pro forma combined statements of earnings, are expected to have a continuing impact on the consolidated results.

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Note 2—Basis of Presentation (Continued)

        Fair value is defined in ASC 820 as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." This is an exit price concept for the valuation of an asset or liability. Market participants are assumed to be buyers or sellers in the most advantageous market for the asset or liability. Fair value measurement for an asset assumes the highest and best use by these market participants. As a result of the requirements of ASC 820, AbbVie may be required to record assets which are not intended to be used or sold and/or to value assets at fair value measurement that do not reflect AbbVie's intended use for those assets. Fair value measurements can be highly subjective and it is possible the application of reasonable judgment could develop different assumptions resulting in a range of alternative estimates using the same facts and circumstances.

Note 3—Accounting Policies

        Acquisition accounting rules require evaluation of certain assumptions, estimates, or determination of financial statement classifications which are completed during the measurement period as defined in current accounting standards. The accounting policies of AbbVie may materially vary from those of Pharmacyclics. During preparation of the unaudited pro forma condensed combined financial information, management has performed a preliminary analysis and is not aware of any material differences, and accordingly, this unaudited pro forma condensed combined financial information assumes no material differences in accounting policies between the two companies other than the pro forma reclassifications detailed in Note 4. Following the acquisition and during the measurement period, management will conduct a final review of Pharmacyclics' accounting policies in order to determine if differences in accounting policies require adjustment or reclassification of Pharmacyclics' results of operations or reclassification of assets or liabilities to conform to AbbVie's accounting policies and classifications. As a result of this review, management may identify differences that, when conformed, could have a material impact on these unaudited pro forma condensed combined financial statements.

Note 4—Reclassification of Pharmacyclics historical financial information

        Certain reclassifications have been made to Pharmacyclics' historical financial statements to conform to AbbVie's presentation, as follows.

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Note 4—Reclassification of Pharmacyclics historical financial information (Continued)

Reclassifications included in the unaudited pro forma condensed combined balance sheet

 
  As of December 31, 2014  
(in millions)
  Pharmacyclics
before
reclassification
  Reclassifications   Pharmacyclics
after
reclassification
 

Advances to manufacturers

  $ 12   $ (12 ) $  

Prepaid expenses and other

    21     12     60  

          27        

Marketable securities

    12     (12 )    

Short-term investments

        12     12  

Receivable from collaboration partners

    27     (27 )    

Payable to collaboration partner

    80     (80 )    

Deferred revenue—current portion

    19     (19 )    

Accounts payable and accrued liabilities

    95     80     194  

          19        

Deferred revenue—non-current portion

    35     (35 )    

Long-term liabilities

    2     35     37  

Reclassifications included in the unaudited pro forma condensed combined statements of earnings

 
  For the Year Ended December 31, 2014  
(in millions)
  Pharmacyclics,
before
reclassification
  Reclassifications   Pharmacyclics,
after
reclassification
 

Net sales(a)

  $ 730   $   $ 730  

Cost of products sold

    40     1     267  

          226        

Amortization of intangible assets

    1     (1 )    

Costs of collaboration

    226     (226 )    
(a)
Net sales for the year ended December 31, 2014 included product sales of $492 million, license and milestone revenue of $220 million and collaboration revenues of $17 million.

Note 5—Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments

        The estimated pro forma adjustments as a result of recording assets acquired and liabilities assumed at their respective fair values in accordance with ASC 805 discussed below are preliminary. The final allocation of the purchase price will be determined at a later date and is dependent on a number of factors, including the final valuation of Pharmacyclics' tangible and intangible assets acquired and liabilities assumed. The final valuation of assets acquired and liabilities assumed may be materially different than the value of assets acquired and liabilities assumed resulting from the estimated pro forma adjustments.

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Note 5—Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments (Continued)

        The preliminary consideration and estimated fair value of assets acquired and liabilities assumed as if the acquisition date was December 31, 2014 is presented as follows.

(in millions)
  Amount   Note

Calculation of consideration estimated to be transferred

         

Fair value of shares of AbbVie common stock to be issued to Pharmacyclics stockholders

  $ 8,293   (a)

Cash consideration to be paid to Pharmacyclics stockholders and equity award holders

    12,419   (b)

Fair value of total consideration

  $ 20,712    

Recognized amounts of identifiable assets acquired and liabilities assumed

         

Net book value of assets acquired

  $ 829    

Less transaction costs expected to be incurred by Pharmacyclics

    (94 ) (c)

Less historical Pharmacyclics intangible assets

    (9 ) (e)

Adjustments to net book value of assets acquired and liabilities assumed

    726    

Inventory fair value adjustment

    496   (d)

Identifiable intangible assets at fair value

    18,900   (e)

Other fair value adjustments, net

    47   (f)

Excess amounts due to Janssen upon change in control

    (138 ) (g)

Deferred tax impact of fair value adjustments

    (4,523 ) (h)

Goodwill

  $ 5,204   (j)
(a)
Represents the acquisition date value of shares of AbbVie common stock to be issued to Pharmacyclics stockholders based on 76,016,912 Pharmacyclics shares outstanding as of February 12, 2015 and 65,000 shares expected to be purchased under the Employee Stock Purchase Program (ESPP). For each outstanding share, Pharmacyclics stockholders will receive the mixed consideration, which consists of $152.25 in cash and a number of shares of AbbVie common stock equal to $109.00 divided by the volume weighted average price per share of AbbVie common stock for the ten consecutive trading days ending on and including the second trading day prior to the final expiration date of the offer. In lieu of receiving the mixed consideration, Pharmacyclics stockholders may elect to receive the all-cash consideration or the all-stock consideration, subject to proration as described in this document. Pharmacyclics stockholders who make the all-cash election or the all-stock election in the offer will be subject to proration to ensure that approximately 58.3% of the aggregate consideration in the offer (as reduced by the Pharmacyclics shares held by stockholders who have properly exercised and perfected dissenters' rights under the DGCL) will be paid in cash and approximately 41.7% of the aggregate consideration in the offer will be paid in shares of AbbVie common stock. Pharmacyclics stockholders who make the all-cash election or all-stock election in the merger will be subject to proration to ensure that approximately 58.3% of the aggregate consideration in the merger will be paid in cash and approximately 41.7% of the aggregate consideration in the merger will be paid in AbbVie common

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Note 5—Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments (Continued)

(in millions, except per share data)
   
 

Pharmacyclics shares outstanding and shares expected to be purchased under the ESPP

    76.082  

Consideration per share

  $ 109.00  

Value of share consideration

  $ 8,293  

Weighted average sale price per share AbbVie common stock (closing price per share of AbbVie common stock on March 19, 2015)

  $ 61.19  

Shares of AbbVie common stock to be issued

    135.528  
(b)
Represents anticipated cash consideration to be transferred to (i) Pharmacyclics stockholders and (ii) equity award holders for equity awards vested or expected to be subject to automatic vesting due to change in control provisions upon the close of the transaction.

Pharmacyclics stockholders will receive (i) $152.25 in cash and $109.00 in fair market value of shares of AbbVie common stock, (ii) $261.25 in cash, or (iii) $261.25 in fair market value of AbbVie common stock, at the election of each holder, subject to the election and proration procedures described in this document. Pharmacyclics stockholders who make the all-cash election or the all-stock election in the offer will be subject to proration to ensure that approximately 58.3% of the aggregate consideration in the offer (as reduced by the Pharmacyclics shares held by stockholders who have properly exercised and perfected dissenters' rights under the DGCL) will be paid in cash and approximately 41.7% of the aggregate consideration in the offer will be paid in shares of AbbVie common stock. Pharmacyclics stockholders who make the all-cash election or the all-stock election in the merger will be subject to proration to ensure that approximately 58.3% of the aggregate consideration in the merger will be paid in cash and approximately 41.7% of the aggregate consideration in the merger will be paid in AbbVie common stock. The anticipated cash consideration to Pharmacyclics stockholders reflects the proration of cash consideration and stock consideration described in this document.

Each Pharmacyclics stock option or restricted stock unit award (RSU) outstanding at the effective time of the first merger will be cancelled and converted into the right to receive a cash amount equal to, in the case of RSUs, the all-cash consideration of $261.25 per share underlying such RSU, or in the case of stock options, the excess of the all-cash consideration of $261.25 per share underlying such option less the per-share exercise price of such option. Equity awards that vest as a result of discretionary change in control provisions are attributed to post-combination services in accordance with ASC 805 and accounted for subsequent to the transaction.

(c)
Represents estimated transaction costs to be incurred by Pharmacyclics, which will reduce net assets acquired.

(d)
To record the increase to Pharmacyclics' inventory to present inventory at estimated fair value. This estimated step-up in inventory is preliminary and is subject to change based upon management's final determination of the fair values of finished goods and work-in-process inventories. The amortization of the inventory step-up is reflected as an increase to cost of products sold in the pro forma condensed combined statement of earnings, as detailed in Note 6(d).

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Note 5—Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments (Continued)

(e)
The adjustments reflect the incremental amount necessary to record the estimated fair value of the Pharmacyclics intangible assets acquired. Identifiable intangible assets expected to be acquired consist of the following.

(in millions)
  As of
December 31, 2014
 

Identifiable intangible assets

       

Definite-lived intangible assets

  $ 11,200  

IPR&D

    7,700  

Estimated fair value of identified intangible assets

    18,900  

Historical Pharmacyclics intangible assets

    9  

Pro forma adjustment for estimated fair value of identifiable intangible assets

  $ 18,891  
(f)
Represents adjustments to record various historical liabilities of Pharmacyclics at fair value.

(g)
To record payment for the reimbursement of costs under Pharmacyclics' 2011 worldwide collaboration and license agreement with Janssen Biotech Inc. that become payable upon change in control.

(h)
Reflects the adjustment to deferred income tax assets and liabilities resulting from pro forma acquisition adjustments for the assets and liabilities to be acquired. This estimate of deferred taxes was determined based on the excess book basis over the tax basis of the fair value pro forma adjustments attributable to the assets and liabilities to be acquired. The statutory tax rate was applied, as appropriate, to each adjustment based on the jurisdiction in which the adjustment is expected to occur. In situations where jurisdictional detail was not available, a U.S. statutory rate of 37 percent was applied to the adjustment. This estimate of deferred income tax assets and liabilities is preliminary and is subject to change based upon management's final determination of the fair value of assets acquired and liabilities assumed by jurisdiction.

(i)
To record AbbVie's estimated acquisition-related transaction costs. The unaudited pro forma condensed balance sheet reflects the costs as a reduction of cash with a corresponding decrease to retained earnings, net of tax.

(j)
Goodwill is calculated as the difference between the fair value of the consideration expected to be transferred and the values assigned to the identifiable tangible and intangible assets acquired and liabilities assumed.

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Note 5—Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments (Continued)

(k)
Represents the elimination of Pharmacyclics' historical common stock, additional paid-in capital, accumulated other comprehensive income, and accumulated deficit.

(l)
To record the estimated nonrecurring post-combination expense related to (i) the accelerated vesting of Pharmacyclics equity awards as a result of change in control provisions that are considered discretionary and is effective at the time of the first merger; and (ii) the reimbursement to Pharmacyclics' directors and executive officers for excise taxes resulting from the acquisition so that, on a net after-tax basis, they would be in the same position as if such excise tax had not been applied. The unaudited pro forma condensed balance sheet reflects the costs as a reduction of cash with a corresponding decrease to retained earnings, net of tax.

(m)
AbbVie expects to fund the cash portion of the transaction with a combination of the issuance of new debt and available cash, including pursuant to underwritten notes offerings of AbbVie. In connection with entering into the merger agreement, AbbVie executed a commitment letter, dated March 4, 2015, that provides a commitment, subject to the satisfaction of standard conditions, for an $18.0 billion, 364-day senior unsecured bridge loan facility. The bridge loan facility can be used to fund the cash portion of the merger consideration and other expenses of the merger. For purposes of the unaudited pro forma condensed combined financial statements, AbbVie assumes the bridge loan facility financed the cash portion of the transaction. The unaudited pro forma condensed combined balance sheet presents borrowings under the bridge loan facility as long-term debt under the assumption that AbbVie has the intent and ability to replace the bridge loan facility with long-term debt financing.

(n)
Represents financing-related transaction fees expected to be incurred, all of which are expected to be capitalized in prepaid expenses and other as debt issuance costs associated with the bridge loan facility.

Note 6—Unaudited Pro Forma Condensed Combined Statement of Earnings Adjustments

(a)
To record estimated pro forma amortization expense on the definite-lived intangible assets pro forma adjustment discussed in Note 5(e). Pro forma amortization has been estimated on a preliminary basis using the estimated pattern of economic benefit provided by the assets over their estimated useful lives and is as follows.

(in millions)
  For the Year Ended December 31, 2014  

Estimated amortization for acquired definite-lived intangible assets

  $ 188  

Historical Pharmacyclics definite-lived intangible amortization expense

    1  

Pro forma adjustment to cost of products sold

  $ 187  
(b)
Interest expense consists of contractual interest expense, amortization of debt issuance costs and other recurring financing costs associated with the bridge loan facility, with an assumed weighted-average interest rate of 1.55%.

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Note 6—Unaudited Pro Forma Condensed Combined Statement of Earnings Adjustments (Continued)

(c)
Statutory tax rates were applied, as appropriate, to each acquisition adjustment based on the jurisdiction in which the adjustment was expected to occur. In situations where jurisdictional detail was not available, a U.S. statutory rate of 37 percent was applied to the adjustment. The total effective tax rate of the combined company could be significantly different depending on the post-acquisition geographical mix of income and other factors.

(d)
Cost of products sold reflects a pro forma adjustment for the amortization of the inventory step-up. The increase in the value of inventory was reflected as an increase to cost of products sold during the period subsequent to the acquisition date based on a historical average inventory turnover rate.

(e)
To record pro forma compensation expense related to the payment of cash to Pharmacyclics equity award holders as a result of discretionary accelerated vesting of equity awards that will be paid contingent upon the holder's continued service with AbbVie through December 31, 2015, in accordance with the merger agreement. In accordance with ASC 805, these amounts will be attributable to post-combination services and accounted for subsequent to the transaction.

(f)
Reversal of deferred revenue recognized by Pharmacyclics to record at fair value.

Note 7—Earnings per Share

        The unaudited pro forma combined basic and diluted earnings per share for the year ended December 31, 2014 has been adjusted by the shares expected to be issued by AbbVie in connection with the acquisition.

(in millions, except per share data)
   
 

Value of the stock consideration

  $ 8,293  

AbbVie price per share (as of March 19, 2015)

  $ 61.19  

AbbVie shares to be issued

    135.528  

        An increase or decrease in AbbVie common share price by $5 per share would decrease or increase the number of shares to be issued by approximately 10.2 million or 12.1 million, respectively.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

        The following section describes the material U.S. federal income tax consequences of the offer and the merger, taken together, to "U.S. holders" (as defined below) of Pharmacyclics shares. This summary is based on provisions of the Code, final, temporary or proposed U.S. Treasury Regulations promulgated thereunder, judicial opinions, published positions of the Internal Revenue Service ("IRS") and all other applicable authorities, all as in effect as of the date of this document and all of which are subject to change, possibly with retroactive effect. Any such change could affect the accuracy of the statements and conclusions set forth in this document.

        For purposes of this discussion, the term "U.S. holder" means a beneficial owner of Pharmacyclics shares that is, for U.S. federal income tax purposes:

        If an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes holds Pharmacyclics shares, the tax treatment of a partner in such entity generally will depend on the status of the partners and the activities of the partnership. If you are a partner in a partnership holding Pharmacyclics shares, please consult your tax advisor.

        This discussion only addresses holders of Pharmacyclics shares that are U.S. holders and hold their Pharmacyclics shares as a capital asset within the meaning of Section 1221 of the Code. Further, this summary does not address all aspects of U.S. federal income taxation that may be relevant to a holder in light of the holder's particular circumstances or that may be applicable to holders subject to special treatment under U.S. federal income tax law (including, for example, persons that are not U.S. holders, financial institutions, dealers in securities, traders in securities that elect mark-to-market treatment, insurance companies, mutual funds, tax-exempt organizations, partnerships or other flow-through entities and their partners or members, U.S. expatriates, holders liable for the alternative minimum tax or the tax on net investment income, holders whose functional currency is not the U.S. dollar, holders who hold their Pharmacyclics shares as part of a hedge, straddle, constructive sale or conversion transaction, holders who acquired their Pharmacyclics shares through the exercise of employee stock options or other compensation arrangements, and holders who exercise dissenters' rights). In addition, no information is provided herein with respect to the tax consequences of the offer and the merger under applicable state, local or non-U.S. laws or federal laws other than those pertaining to the U.S. federal income tax.

        ALL HOLDERS OF PHARMACYCLICS SHARES SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE AND LOCAL, FOREIGN AND OTHER TAX LAWS.

Treatment of the Offer and the Merger as a "Reorganization"

        It is a condition to the consummation of the offer that each of AbbVie and Pharmacyclics receive an opinion from their respective legal counsel to the effect that the offer and the merger, taken

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together, will qualify as a reorganization within the meaning of Section 368(a) of the Code, and the U.S. federal income tax consequences to holders of Pharmacyclics shares who receive shares of AbbVie common stock and/or cash in exchange for Pharmacyclics shares pursuant to the offer and/or the merger generally will be as described below. Such opinions will be based on factual representations contained in letters provided by AbbVie and Pharmacyclics, and on certain customary factual assumptions, all of which must continue to be true and accurate as of the consummation of the offer. However, no ruling has been or will be sought from the IRS as to the U.S. federal income tax consequences of the offer and the merger. Consequently, there can be no assurance that the offer and the merger, taken together, will qualify as a reorganization for U.S. federal income tax purposes. There also can be no assurance that the IRS will not disagree with, or challenge, any of the conclusions described below.

        If the offer and the merger, taken together, qualify as a "reorganization" within the meaning of Section 368(a) of the Code, the U.S. federal income tax consequences to Pharmacyclics stockholders who receive shares of AbbVie common stock and/or cash in exchange for shares pursuant to offer and/or the merger generally will be as follows:

        A holder of Pharmacyclics shares who exchanges all of its Pharmacyclics shares solely for shares of AbbVie common stock will not recognize gain or loss for U.S. federal income tax purposes, except with respect to cash received in lieu of a fractional share of AbbVie common stock. The aggregate tax basis of the shares of AbbVie common stock received (including any fractional shares deemed received and exchanged for cash) will be equal to the aggregate tax basis in the Pharmacyclics shares surrendered. The holding period of the AbbVie common stock received (including any fractional shares deemed received and exchanged for cash) will include the holding period of the Pharmacyclics shares surrendered.

        The exchange of Pharmacyclics shares solely for cash generally will result in recognition of gain or loss by the holder in an amount equal to the difference between the amount of cash received and the holder's tax basis in the Pharmacyclics shares surrendered. The gain or loss recognized will be long-term capital gain or loss if, as of the date of the exchange, the holder's holding period for the Pharmacyclics shares surrendered exceeds one year. The deductibility of capital losses is subject to limitations. In some cases, if a holder actually or constructively owns AbbVie common stock after the merger, the cash received could be treated as having the effect of the distribution of a dividend under the tests set forth in Section 302 of the Code, in which case such holder may have dividend income up to the amount of the cash received. In such cases, holders that are corporations should consult their tax advisors regarding the potential applicability of the "extraordinary dividend" provisions of the Code.

        If the holder's adjusted tax basis in the Pharmacyclics shares surrendered is less than the sum of the fair market value of the shares of AbbVie common stock and the amount of cash (other than cash received in lieu of a fractional share of AbbVie common stock) received by the holder, then the holder will recognize gain in an amount equal to the lesser of (1) the sum of the amount of cash (other than cash received in lieu of a fractional share of AbbVie common stock) and the fair market value of the AbbVie common stock received, minus the adjusted tax basis of the Pharmacyclics shares surrendered in exchange therefor, and (2) the amount of cash received by the holder. However, if a holder's adjusted tax basis in the Pharmacyclics shares surrendered is greater than the sum of the amount of cash (other than cash received in lieu of a fractional share of AbbVie common stock) and the fair market value of the AbbVie common stock received, the holder's loss will not be currently allowed or

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recognized for U.S. federal income tax purposes. If a holder of Pharmacyclics shares acquired different blocks of shares at different times or different prices, the holder should consult the holder's tax advisor regarding the manner in which gain or loss should be determined. Any recognized gain generally will be long-term capital gain if, as of the date of the exchange, the holder's holding period with respect to the Pharmacyclics shares surrendered exceeds one year. In some cases, if the holder actually or constructively owns AbbVie common stock other than AbbVie common stock received in the transaction, the recognized gain could be treated as having the effect of the distribution of a dividend under the tests described in Section 302 of the Code, in which case such gain would be treated as dividend income. In such cases, holders that are corporations should consult their tax advisors regarding the potential applicability of the "extraordinary dividend" provisions of the Code. The aggregate tax basis of the AbbVie common stock received (including any fractional shares deemed received and exchanged for cash) by a holder that exchanges its Pharmacyclics shares for a combination of AbbVie common stock and cash will be equal to the aggregate adjusted tax basis of the shares surrendered, reduced by the amount of cash received by the holder (excluding any cash received instead of fractional shares of AbbVie common stock) and increased by the amount of gain, if any, recognized by the holder (excluding any gain recognized with respect to cash received in lieu of fractional shares of AbbVie common stock) on the exchange. The holding period of the AbbVie common stock received (including any fractional shares deemed received and exchanged for cash) will include the holding period of the Pharmacyclics shares surrendered. Holders receiving a combination of AbbVie common stock and cash should consult their tax advisors regarding the manner in which cash and AbbVie common stock should be allocated among the holder's shares and the manner in which the above rules would apply in the holder's particular circumstances.

        A holder that receives cash in lieu of a fractional share of AbbVie common stock generally will be treated as having received such fractional share in the offer or the merger and then as having received cash in exchange for such fractional share. Gain or loss generally will be recognized based on the difference between the amount of cash received in lieu of the fractional share and the tax basis allocated to such fractional share of AbbVie common stock. Such gain or loss generally will be long-term capital gain or loss if, as of the date of the exchange, the holding period for such shares is greater than one year.

        Pharmacyclics stockholders who owned at least five percent (by vote or value) of the total outstanding shares of Pharmacyclics, or owned Pharmacyclics shares with a tax basis of $1 million or more, are required to attach a statement to their tax returns for the year in which the integrated merger is completed that contains the information listed in Treasury Regulations Section 1.368-3(b). Such statement must include the Pharmacyclics stockholder's tax basis in that stockholder's Pharmacyclics shares and the fair market value of such shares.

Information Reporting and Backup Withholding

        Certain U.S. holders may be subject to information reporting with respect to the cash received in exchange for shares, including cash received instead of a fractional share interest in shares of AbbVie common stock. U.S. holders who are subject to information reporting may be subject, under certain circumstances, to backup withholding (currently, at a rate of 28%) of the cash payable to such holder unless the holder provides proof of an applicable exemption or furnishes its taxpayer identification number, and otherwise complies with all applicable requirements of the backup withholding rules. Any amount withheld under the backup withholding rules is not an additional tax and may be refunded or credited against such U.S. holder's federal income tax liability, provided that the required information is timely furnished to the IRS.

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DESCRIPTION OF ABBVIE CAPITAL STOCK

General

        AbbVie's authorized capital stock consists of 4 billion shares of common stock, par value $0.01 per share, and 200 million shares of preferred stock, par value $0.01 per share, all of which shares of preferred stock are undesignated. AbbVie's board of directors may establish the rights and preferences of the preferred stock from time to time.

Common Stock

        Each holder of AbbVie common stock is entitled to one vote for each share on all matters to be voted upon by the common stockholders, and there are no cumulative voting rights. Subject to any preferential rights of any outstanding preferred stock, holders of AbbVie common stock are entitled to receive ratably the dividends, if any, as may be declared from time to time by its board of directors out of funds legally available for that purpose. If there is a liquidation, dissolution or winding up of AbbVie, holders of its common stock would be entitled to ratable distribution of its assets remaining after the payment in full of liabilities and any preferential rights of any then outstanding preferred stock.

        Holders of AbbVie common stock will have no preemptive or conversion rights or other subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of AbbVie common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that AbbVie may designate and issue in the future.

Preferred Stock

        Under the terms of AbbVie's amended and restated certificate of incorporation, its board of directors is authorized, subject to limitations prescribed by the DGCL and by its amended and restated certificate of incorporation, to issue up to 200 million shares of preferred stock in one or more series without further action by the holders of its common stock. AbbVie's board of directors has the discretion, subject to limitations prescribed by the DGCL and by AbbVie's amended and restated certificate of incorporation, to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. As of the date of this document, no shares of preferred stock were issued or outstanding.

Anti-Takeover Effects of Various Provisions of Delaware Law and AbbVie's Amended and Restated Certificate of Incorporation and By-laws

        Provisions of the DGCL and AbbVie's amended and restated certificate of incorporation and by-laws could make it more difficult to acquire AbbVie by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors. These provisions, summarized below, are expected to discourage certain types of coercive takeover practices and takeover bids that its board of directors may consider inadequate and to encourage persons seeking to acquire control of the company to first negotiate with AbbVie's board of directors.

        Delaware Anti-Takeover Statute.    AbbVie is subject to Section 203 of the DGCL, an anti-takeover statute. In general, Section 203 of the DGCL prohibits a publicly-held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years following the time the person became an interested stockholder, unless the business combination or the acquisition of shares that resulted in a stockholder becoming an interested stockholder is approved in a prescribed manner. Generally, a "business combination" includes a merger, asset or stock sale, or other

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transaction resulting in a financial benefit to the interested stockholder. Generally, an "interested stockholder" is a person who, together with affiliates and associates, owns (or within three years prior to the determination of interested stockholder status did own) 15% or more of a corporation's voting stock. The existence of this provision would be expected to have an anti-takeover effect with respect to transactions not approved in advance by AbbVie's board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by AbbVie's stockholders.

        Board Structure.    AbbVie's amended and restated certificate of incorporation and amended and restated by-laws provide that its board of directors be divided into three classes. At any meeting of stockholders for the election of directors at which a quorum is present, the election will be determined by a majority of the votes cast by the stockholders entitled to vote in the election, with directors not receiving a majority of the votes cast required to tender their resignations for consideration by the board, except that in the case of a contested election, the election will be determined by a plurality of the votes cast by the stockholders entitled to vote in the election. Under the classified board provisions, it would take at least two elections of directors for any individual or group to gain control of AbbVie's board. Accordingly, these provisions could discourage a third party from initiating a proxy contest, making a tender offer or otherwise attempting to gain control of AbbVie.

        Removal of Directors.    AbbVie's amended and restated by-laws provide that its stockholders may only remove its directors for cause.

        Amendments to Certificate of Incorporation.    AbbVie's amended and restated certificate of incorporation provides that the affirmative vote of the holders of at least 80% of its voting stock then outstanding is required to amend certain provisions relating to the number, term and removal of its directors, the filling of its board vacancies, the calling of special meetings of stockholders, stockholder action by written consent, and director and officer indemnification.

        Amendments to By-Laws.    AbbVie's by-laws provide that they may be amended by AbbVie's board of directors or by the affirmative vote of holders of a majority of AbbVie's voting stock then outstanding, except that the affirmative vote of holders of at least 80% of AbbVie's voting stock then outstanding is required to amend certain provisions relating to the number, term and removal of AbbVie's directors, the filling of its board vacancies, the calling of special meetings of stockholders, stockholder action by written consent, and director and officer indemnification.

        Size of Board and Vacancies.    AbbVie's amended and restated by-laws provide that the number of directors on its board of directors will be fixed exclusively by its board of directors. Any vacancies created in its board of directors resulting from any increase in the authorized number of directors or the death, resignation, retirement, disqualification, removal from office or other cause will be filled by a majority of the board of directors then in office, even if less than a quorum is present, or by a sole remaining director. Any director appointed to fill a vacancy on AbbVie's board of directors will be appointed for a term expiring at the next election of the class for which such director has been appointed, and until his or her successor has been elected and qualified.

        Special Stockholder Meetings.    AbbVie's amended and restated certificate of incorporation provides that only the chairman of its board of directors, its chief executive officer, any president or its board of directors pursuant to a resolution adopted by a majority of the entire board of directors may call special meetings of AbbVie stockholders. Stockholders may not call special stockholder meetings.

        Stockholder Action by Written Consent.    AbbVie's amended and restated certificate of incorporation provides that any action of its stockholders must be taken at an annual or special meeting of stockholders and may not be effected by written consent of AbbVie stockholders.

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        Requirements for Advance Notification of Stockholder Nominations and Proposals.    AbbVie's amended and restated by-laws establish advance notice procedures with respect to stockholder proposals and nomination of candidates for election as directors other than nominations made by or at the direction of its board of directors or a committee of its board of directors.

        No Cumulative Voting.    The DGCL provides that stockholders are denied the right to cumulate votes in the election of directors unless the company's certificate of incorporation provides otherwise. AbbVie's amended and restated certificate of incorporation does not provide for cumulative voting.

        Undesignated Preferred Stock.    The authority that AbbVie's board of directors possesses to issue preferred stock could potentially be used to discourage attempts by third parties to obtain control of AbbVie through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult or more costly. AbbVie's board of directors may be able to issue preferred stock with voting rights or conversion rights that, if exercised, could adversely affect the voting power of the holders of common stock.

Limitations on Liability, Indemnification of Officers and Directors, and Insurance

        The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors' fiduciary duties as directors, and AbbVie's amended and restated certificate of incorporation includes such an exculpation provision. AbbVie's amended and restated certificate of incorporation and by-laws include provisions that indemnify, to the fullest extent allowable under the DGCL, the personal liability of directors or officers for monetary damages for actions taken as a director or officer of AbbVie, or for serving at AbbVie's request as a director or officer or another position at another corporation or enterprise, as the case may be. AbbVie's amended and restated certificate of incorporation and by-laws also provide that AbbVie must indemnify and advance reasonable expenses to its directors and officers, subject to an undertaking from the indemnified party as may be required under the DGCL. AbbVie's by-laws expressly authorize AbbVie to carry directors' and officers' insurance to protect AbbVie, its directors, officers and certain employees for some liabilities.

        The limitation of liability and indemnification provisions that are in AbbVie's amended and restated certificate of incorporation and by-laws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against AbbVie's directors and officers, even though such an action, if successful, might otherwise benefit AbbVie and its stockholders. However, these provisions will not limit or eliminate AbbVie's rights, or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director's duty of care. The provisions will not alter the liability of directors under the federal securities laws.

Exclusive Forum

        AbbVie's amended and restated certificate of incorporation provides that unless the board of directors otherwise determines, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of AbbVie, any action asserting a claim of breach of a fiduciary duty owed by any director or officer of AbbVie to AbbVie or AbbVie's stockholders, creditors or other constituents, any action asserting a claim against AbbVie or any director or officer of AbbVie arising pursuant to any provision of the DGCL or AbbVie's amended and restated certificate of incorporation or by-laws, or any action asserting a claim against AbbVie or any director or officer of AbbVie governed by the internal affairs doctrine. However, if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, the action may be brought in another court sitting in the State of Delaware.

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Authorized but Unissued Shares

        AbbVie's authorized but unissued shares of common stock and preferred stock will be available for future issuance without your approval. AbbVie may use additional shares for a variety of purposes, including future public offerings to raise additional capital, to fund acquisitions and as employee compensation. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of AbbVie by means of a proxy contest, tender offer, merger or otherwise.

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COMPARISON OF STOCKHOLDERS' RIGHTS

        As a result of the offer and the merger, holders of Pharmacyclics shares will become holders of AbbVie common stock. Both AbbVie and Pharmacyclics are Delaware corporations and are governed by the DGCL, so many of the differences between the rights of the stockholders of AbbVie and the current rights of the stockholders of Pharmacyclics arise primarily from differences in their respective constituent documents.

        The following is a summary of the material differences between the current rights of Pharmacyclics stockholders and the current rights of AbbVie stockholders under Delaware law and their respective constituent documents. It is not a complete statement of the provisions affecting, and the differences between, the rights of AbbVie and Pharmacyclics stockholders. This summary is qualified in its entirety by reference to Delaware law and AbbVie's and Pharmacyclics' respective constituent documents. To find out where copies of these documents can be obtained, see "Where to Obtain More Information."

 
  Pharmacyclics   AbbVie

Authorized Capital Stock

  The authorized capital stock of Pharmacyclics currently consists of (1) 150,000,000 shares of common stock, par value $0.0001 per share, and (2) 1,000,000 shares of preferred stock, par value $0.0001 per share.   The authorized capital stock of AbbVie currently consists of (1) 4,000,000,000 shares of common stock, par value $0.01 per share, and (2) 200,000,000 shares of preferred stock, par value $0.01 per share.

Number of Directors and Size of Board

 

Pharmacyclics' by-laws provide for between three and 15 directors to serve on its board of directors and authorizes the board of directors to set the number of directors within these parameters.

 

AbbVie's certificate of incorporation authorizes the board of directors to set the number of directors.

 

The Pharmacyclics board of directors currently consists of seven directors.

 

AbbVie's board of directors currently consists of nine directors.

Term of Directors

 

Pharmacyclics' directors are elected to one-year terms expiring at the next annual stockholders' meeting following election. Pharmacyclics' certificate of incorporation does not provide for staggered terms.

 

AbbVie's directors serve for three year terms. The directors are divided into three classes, and the terms of approximately one-third of the directors expire each year.

Removal of Directors

 

Pharmacyclics' by-laws provide that any or all of Pharmacyclics' directors may be removed with or without cause by the affirmative vote of the stockholders holding a majority of the shares entitled to vote in the election of such director.

 

AbbVie's certificate of incorporation provides that, subject to the rights of the holders of any series of preferred stock, any or all of the directors may be removed from office at any time, but only for cause by the affirmative vote of the holders of a majority of the then outstanding shares of capital stock entitled to vote generally in the election of directors, voting as a single class.

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  Pharmacyclics   AbbVie

Special Stockholders' Meetings

 

The Pharmacyclics charter and by-laws provide that special meetings of Pharmacyclics stockholders may not be called by Pharmacyclics stockholders. These meetings may only be called by:

 

The AbbVie charter and by-laws provide that special meetings of AbbVie stockholders may not be called by AbbVie stockholders. These meetings may only be called by:

 

the board of directors;

the chairman of the board of directors;

the vice chairman of the board of directors; or

the president.

The Pharmacyclics by-laws further provide that business transacted at any special meeting shall be confined to the purposes stated in the notice of the meeting.

 

the board of directors pursuant to a resolution adopted by a majority of the total number of directors which AbbVie would have if there were no vacancies;

the chairman of the board of directors;

the chief executive officer; or

by any president.

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  Pharmacyclics   AbbVie

Delivery and Notice Requirements of Stockholder Nominations and Proposals

 

Under the Pharmacyclics by-laws, for business to be properly brought before the annual meeting by a stockholder, the stockholder must (1) be a stockholder of record who is entitled to vote at the meeting and (2) deliver notice to the principal executive offices of Pharmacyclics upon the earlier of (A) not less than 90 nor more than 120 days prior to the first anniversary of the preceding year's meeting and (B) not less than 45 nor more than 75 days prior to first anniversary of the date when Pharmacyclics first sent or gave its proxy statement to stockholders for the preceding year's annual meeting.

Such notice for the proposal of business other than a nomination of a director must set forth as to each such matter (1) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (2) the name and address, as they appear on the corporation's books, of the stockholder proposing such business, (3) the class and number of shares of the corporation which are beneficially owned by the stockholder, (4) any material interest of the stockholder in such business, and (5) any other information that is required to be provided by the stockholder pursuant to Regulation 14A of the Exchange Act.

Each notice for the nomination of a director must set forth as to each nominee, (1) the name, age, business address and residence address of such person, (2) the principal occupation or employment of such person, (3) the class and number of shares of the corporation which are beneficially owned by such person, (4) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or

 

Under the AbbVie by-laws, for business to be properly brought before the annual meeting or a special meeting called to elect a director by a stockholder, the stockholder must (1) be a stockholder of record who is entitled to vote at the meeting and (2) deliver notice to the Secretary at the principal executive offices of AbbVie not less than 90 nor more than 120 days prior to the first anniversary of the preceding year's meeting; in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice must be delivered not less than 90 nor more than 120 days prior to the date of the annual meeting or, if the first public announcement of the date of the annual meeting is less than 100 days prior to the date of the meeting, within ten days of the first public announcement of the meeting. The stockholder's notice must also be updated so that its information is current as of the record date and ten business days prior to the meeting.

The stockholder's notice must contain the name and address of such stockholder, affiliates and any others acting in concert, and with respect to AbbVie: (1) shares beneficially owned, (2) options, warrants, convertible securities, stock appreciation rights, or similar rights and derivative instruments beneficially owned, (3) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any class or series of shares, (4) any agreement, repurchase, "stock borrowing" or other short interests, (5) any rights to dividends that are separated from underlying shares, (6) any proportionate interest a general or limited partnership holding shares or derivative instruments, (7) any performance-related fees (other than an asset-based fee) that such

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  Pharmacyclics   AbbVie

  persons) pursuant to which the nominations are to be made by the stockholder, and (5) any other information relating to such person that is required to be disclosed in solicitations of proxies for elections of directors, or is otherwise required, in each case pursuant to Regulation 14A under the 1934 Act (including without limitation such person's written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected)

The chairman of any meeting of stockholders may refuse to recognize the nomination of any person not made in compliance with the foregoing procedures.

  stockholder or members of such stockholder's immediate family sharing the same household are entitled to based on any increase or decrease in the value of shares or derivative instruments, (8) any significant equity interests or any derivative instruments or short interests in any principal competitor of AbbVie held by such stockholder, and (9) any direct or indirect interest in any agreement with AbbVie, as well as all other information to be filed with the SEC if such stockholder or stockholders were a participant in a solicitation for the proposal or a contested election subject to Section 14 of the Exchange Act.

Such notice for the proposal of business other than a nomination of a director must set also forth as to each such matter (1) a description of the proposal and the reasons for conducting such business at the annual meeting, (2) the text of the proposal or business, and (3) a description of all agreements with any other person with respect to the proposal.

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  Pharmacyclics   AbbVie

     

Each notice for the nomination of a director must also set forth (1) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected) and (2) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between the stockholder (and any affiliate or associate) and each proposed nominee (and any affiliate or associate), including all information that would be required to be disclosed pursuant to Rule 404, as well as a completed and signed questionnaire, representation and agreement by the nominee.

Stockholder Action by Written Consent

 

The Pharmacyclics by-laws provide that action may be taken by written consent if signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting.

 

The AbbVie certificate of incorporation and by-laws provide that any action required to be taken by the stockholders may not be taken by a written consent.

Amendment of Governing Documents

 

Stockholder approval of an amendment to the Pharmacyclics certificate of incorporation requires the affirmative vote of a majority of the outstanding shares entitled to vote.

 

The AbbVie certificate of incorporation provides that certain provisions may not be amended without the affirmative vote of 80% of the outstanding shares entitled to vote.

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  Pharmacyclics   AbbVie

 

The Pharmacyclics by-laws provide that the Pharmacyclics by-laws may be amended or repealed or new by-laws adopted upon the approval of the Pharmacyclics board of directors or by the holders of at least 662/3% of the voting power of all of the then outstanding shares entitled to vote with respect to certain provisions.

 

The AbbVie certificate of incorporation provides that the AbbVie by-laws may be amended or repealed or new by-laws adopted upon the approval of the AbbVie board of directors, by a majority of the outstanding shares of common stock, except with respect to certain provisions that require an affirmative vote of at least 80% of the voting power of all of the then outstanding shares entitled to vote in the election of directors.

Exculpation of Directors

 

Under the DGCL and the Pharmacyclics certificate of incorporation, directors shall not be personally liable to Pharmacyclics or any stockholder for monetary damages for breach of fiduciary duty as a director, except (1) for any breach of the director's duty of loyalty to Pharmacyclics or its stockholders; (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (3) for intentional or negligent payment of unlawful dividends or stock purchases or redemptions; or (4) for any transaction from which the director derived an improper personal benefit. The Pharmacyclics certificate of incorporation further provides that if the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors of Pharmacyclics, then the liability of the directors of Pharmacyclics shall be eliminated or limited to the fullest extent permitted by the DGCL. Should Section 2115 of the California Corporations Code apply to Pharmacyclics, the foregoing may be limited by the provisions of California law.

 

Under the DGCL and the AbbVie certificate of incorporation, directors shall not be personally liable to AbbVie or any stockholder for monetary damages for breach of fiduciary duty as a director, except (1) for any breach of the director's duty of loyalty to AbbVie or its stockholders; (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (3) for intentional or negligent payment of unlawful dividends or stock purchases or redemptions; or (4) for any transaction from which the director derived an improper personal benefit. The AbbVie certificate of incorporation further provides that if the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors of AbbVie, then the liability of the directors of AbbVie shall be eliminated or limited to the fullest extent permitted by the DGCL.

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  Pharmacyclics   AbbVie

Indemnification of Directors, Officers and Employees

 

Under the DGCL and the Pharmacyclics certificate of incorporation and by-laws, Pharmacyclics shall indemnify any person made a party or threatened to be made a party to any type of proceeding (other than an action by or in the right of the corporation) because he or she is or was or a person of whom he or she is the legal representative is or was an officer or director of Pharmacyclics, or was serving at the request of Pharmacyclics as a director, officer, employee or agent of another corporation or entity, against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such proceeding: (2) if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation; or (2) in the case of a criminal proceeding, such person had no reasonable cause to believe that his or her conduct was unlawful.

 

Under the DGCL and the AbbVie by-laws, AbbVie shall indemnify any person made a party or threatened to be made a party to any type of proceeding (other than an action by or in the right of the corporation) because he or she is or was or a person of whom he or she is the legal representative is or was an officer or director of AbbVie, or was serving at the request of AbbVie as a director, officer, trustee, employee or agent of another corporation or entity, against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such proceeding: (1) if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation; or (2) in the case of a criminal proceeding, such person had no reasonable cause to believe that his or her conduct was unlawful.

 

Additionally, the DGCL provides that a corporation must indemnify a director or officer against expenses (including attorneys' fees) actually and reasonably incurred if such person successfully defends himself or herself in a proceeding to which such person was a party because he or she was a director or officer of the corporation.

 

Additionally, the DGCL provides that a corporation must indemnify a director or officer against expenses (including attorneys' fees) actually and reasonably incurred if such person successfully defends himself or herself in a proceeding to which such person was a party because he or she was a director or officer of the corporation.

 

The DGCL further provides that Pharmacyclics may purchase and maintain insurance on behalf of any director, officer, employee or agent of Pharmacyclics against any liability asserted against such person and incurred by such person in any such capacity, whether or not Pharmacyclics would have the power to indemnify such person against such liability.

 

The DGCL and AbbVie's by-laws further provide that AbbVie may purchase and maintain insurance on behalf of any director, officer, employee or agent of AbbVie against any liability asserted against such person and incurred by such person in any such capacity, whether or not AbbVie would have the power to indemnify such person against such liability.

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  Pharmacyclics   AbbVie

 

Should Section 2115 of the California Corporations Code apply to Pharmacyclics, the foregoing may be limited by the provisions of California law.

   

Exclusive Forum Provision

 

Pharmacyclics' by-laws provide that the sole and exclusive forum for any derivative action or proceeding brought on behalf of Pharmacyclics, any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Pharmacyclics to Pharmacyclics or the Pharmacyclics stockholders, any action asserting a claim against Pharmacyclics or any director, officer or other employee of Pharmacyclics arising pursuant to or interpreting any provision of the DGCL, Pharmacyclics' certificate of incorporation or by-laws, or any action asserting a claim against Pharmacyclics or any director, officer or other employee of Pharmacyclics governed by the internal affairs doctrine will be the courts of Santa Clara County, California (or if those courts decline to accept jurisdiction, any federal court within the Northern District of California).

 

AbbVie's certificate of incorporation provides that the sole and exclusive forum for any derivative action or proceeding brought on behalf of AbbVie, any action asserting a claim of breach of a fiduciary duty owed by any director or officer of AbbVie to AbbVie or AbbVie's stockholders, creditors or other constituents, any action asserting a claim against AbbVie or any director or officer of AbbVie arising pursuant to any provision of the DGCL or AbbVie's amended and restated certificate of incorporation or by-laws, or any action asserting a claim against AbbVie or any director or officer of AbbVie governed by the internal affairs doctrine will be the Court of Chancery of the State of Delaware (or if such court declines to accept jurisdiction, another court sitting in the State of Delaware).

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LEGAL MATTERS

        The validity of the AbbVie common stock offered by this document will be passed upon for AbbVie by Wachtell, Lipton, Rosen & Katz, New York, New York.


EXPERTS

        The combined financial statements for the year ended December 31, 2012 incorporated in this document by reference from AbbVie's Annual Report on Form 10-K for the year ended December 31, 2014 have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such combined financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

        Ernst & Young LLP, independent registered public accounting firm, has audited AbbVie's consolidated financial statements included in AbbVie's Annual Report on Form 10-K for the year ended December 31, 2014, and the effectiveness of AbbVie's internal control over financial reporting as of December 31, 2014 as set forth in their reports, which are incorporated by reference in this prospectus/offer and elsewhere in the registration statement. AbbVie's financial statements are incorporated by reference in reliance on Ernst & Young LLP's reports, given on their authority as experts in accounting and auditing

        The consolidated financial statements and management's assessment of the effectiveness of internal control over financial reporting (which is included in Management's Report on Internal Control over Financial Reporting) incorporated in this registration statement by reference to the Annual Report on Form 10-K for the year ended December 31, 2014 of Pharmacyclics, Inc. have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

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WHERE TO OBTAIN MORE INFORMATION

        AbbVie and Pharmacyclics file annual, quarterly and current reports, proxy statements and other information with the SEC. Pharmacyclics stockholders may read and copy any reports, statements or other information that AbbVie or Pharmacyclics file with the SEC at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information regarding the public reference room. AbbVie's and Pharmacyclics' public filings also are available to the public from commercial document retrieval services and may be obtained without charge at the SEC's website at www.sec.gov.

        AbbVie has filed a registration statement on Form S-4 with the SEC to register the offer and sale of shares of AbbVie common stock to be issued in the offer and the merger. This document is a part of that registration statement. AbbVie may also file amendments to such registration statement. In addition, on March 23, 2015, AbbVie and the Offeror filed with the SEC a Tender Offer Statement on Schedule TO under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), together with exhibits, to furnish certain information about the offer. AbbVie and the Offeror may file amendments to the Schedule TO. As allowed by SEC rules, this document does not contain all of the information in the registration statement or the Schedule TO, or the exhibits to the registration statement or the Schedule TO. You may obtain copies of the Form S-4 and Schedule TO (and any amendments to those documents) by contacting the information agent as directed on the back cover of this document.

        The SEC allows AbbVie to incorporate information into this document "by reference," which means that AbbVie and the Offeror can disclose important information to Pharmacyclics stockholders by referring to another document or information filed separately with the SEC. The information incorporated by reference is deemed to be part of this document, except for any information amended or superseded by information contained in, or incorporated by reference into, this document. This document incorporates by reference the documents and information set forth below that AbbVie and Pharmacyclics have previously filed with the SEC. These documents contain important information about AbbVie and Pharmacyclics and their financial conditions.

AbbVie Filings:

AbbVie Information Incorporated by Reference
  Period Covered or Date of Filing
Annual Report on Form 10-K   Fiscal year ended December 31, 2014, as filed with the SEC on February 20, 2015 (including the information in Part III incorporated by reference from AbbVie's Definitive Proxy Statement on Schedule 14A, filed on March 20, 2015)

The description of AbbVie common stock set forth in AbbVie's Registration Statement on Form 10, filed with the SEC on June 4, 2012, including all amendments and reports filed for the purpose of updating such description.

 

 

Current Reports on Form 8-K

  Filed on:

March 5, 2015

March 6, 2015

March 20, 2015

March 23, 2015

March 30, 2015

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Pharmacyclics Filings:

Pharmacyclics Information Incorporated by Reference
  Period Covered or Date of Filing
Annual Report on Form 10-K   Fiscal year ended December 31, 2014, as filed with the SEC on February 18, 2015.

Amendment No. 1 to Annual Report on Form 10-K

 

Fiscal year ended December 31, 2014, as filed with the SEC on April 8, 2015.

The description of Pharmacyclics' common stock set forth in Pharmacyclics' Registration Statement on Form 8-A, filed with the SEC on August 22, 1995 and October 20, 1995, including all amendments and reports filed for the purpose of updating such description.

 

 

Current Reports on Form 8-K

  Filed with the SEC on:

February 20, 2015

March 5, 2015

March 6, 2015

March 17, 2015

March 23, 2015

        AbbVie also hereby incorporates by reference any additional documents that either it or Pharmacyclics may file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act from the date of this document to the termination of the offer. Nothing in this document shall be deemed to incorporate information furnished but not filed with the SEC.

        Pharmacyclics stockholders may obtain any of these documents without charge upon request to the information agent, Georgeson Inc. toll free at (888) 680-1528, or from the SEC at the SEC's website at www.sec.gov.

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ANNEX A

        Agreement and Plan of Reorganization, dated as of March 4, 2015, as amended as of March 22, 2015, by and among AbbVie Inc., Oxford Amherst Corporation, Oxford Amherst LLC and Pharmacyclics, Inc. (composite copy incorporating the Agreement and Plan of Reorganization, dated as of March 4, 2015 and Amendment No. 1 to Agreement and Plan of Reorganization, dated as of March 22, 2015).

        Each reference in the Agreement and Plan of Reorganization to "this Agreement," "hereof," "hereunder," "herein" or words of like import referring to the Agreement and Plan of Reorganization shall mean and be a reference to the Agreement and Plan of Reorganization as amended by Amendment No. 1 to the Agreement and Plan of Reorganization. All references in the Agreement and Plan of Reorganization to "the date hereof" or "the date of this Agreement" shall refer to March 4, 2015.


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AGREEMENT AND PLAN OF REORGANIZATION

by and among

ABBVIE INC.,

OXFORD AMHERST CORPORATION,

OXFORD AMHERST LLC

and

PHARMACYCLICS, INC.

dated as of

March 4, 2015

As Amended as of March 22, 2015


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TABLE OF CONTENTS

 
   
  Page  

ARTICLE I THE OFFER

    A-2  

Section 1.1.

 

The Offer

   
A-2
 

Section 1.2.

 

Company Actions

    A-8  

ARTICLE II THE MERGERS

   
A-10
 

Section 2.1.

 

The Mergers

   
A-10
 

Section 2.2.

 

Closing

    A-10  

Section 2.3.

 

Effective Times

    A-10  

Section 2.4.

 

Governing Documents

    A-11  

Section 2.5.

 

Officers, Directors and Managers of the Surviving Entities

    A-11  

Section 2.6.

 

Tax Consequences

    A-11  

ARTICLE III TREATMENT OF SECURITIES

   
A-11
 

Section 3.1.

 

Treatment of Capital Stock

   
A-11
 

Section 3.2.

 

Payment for Securities; Surrender of Certificates

    A-14  

Section 3.3.

 

Dissenter's Rights

    A-16  

Section 3.4.

 

Treatment of Company Equity Awards

    A-17  

Section 3.5.

 

Withholding

    A-18  

Section 3.6.

 

Fractional Shares

    A-18  

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY

   
A-19
 

Section 4.1.

 

Qualification, Organization, Subsidiaries, etc

   
A-19
 

Section 4.2.

 

Capitalization

    A-19  

Section 4.3.

 

Corporate Authority

    A-20  

Section 4.4.

 

Governmental Consents; No Violation

    A-21  

Section 4.5.

 

SEC Reports and Financial Statements

    A-22  

Section 4.6.

 

Internal Controls and Procedures

    A-22  

Section 4.7.

 

No Undisclosed Liabilities

    A-22  

Section 4.8.

 

Absence of Certain Changes or Events

    A-23  

Section 4.9.

 

Compliance with Laws; Permits

    A-23  

Section 4.10.

 

Environmental Laws and Regulations

    A-23  

Section 4.11.

 

Employee Benefit Plans

    A-24  

Section 4.12.

 

Regulatory Matters

    A-25  

Section 4.13.

 

Tax Matters

    A-27  

Section 4.14.

 

Labor Matters

    A-28  

Section 4.15.

 

Investigation; Litigation

    A-29  

Section 4.16.

 

Intellectual Property

    A-29  

Section 4.17.

 

Real Property

    A-30  

Section 4.18.

 

Material Contracts

    A-30  

Section 4.19.

 

Insurance

    A-32  

Section 4.20.

 

Information Supplied

    A-32  

Section 4.21.

 

Opinions of Financial Advisor

    A-32  

Section 4.22.

 

State Takeover Statutes

    A-33  

Section 4.23.

 

Finders and Brokers

    A-33  

Section 4.24.

 

No Other Representations

    A-33  

A-i


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  Page  

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBS

    A-33  

Section 5.1.

 

Qualification, Organization, Subsidiaries, etc

   
A-33
 

Section 5.2.

 

Capitalization

    A-34  

Section 5.3.

 

Corporate Authority

    A-34  

Section 5.4.

 

Governmental Consents; No Violation

    A-35  

Section 5.5.

 

SEC Reports and Financial Statements

    A-35  

Section 5.6.

 

Internal Controls and Procedures

    A-36  

Section 5.7.

 

No Undisclosed Liabilities

    A-36  

Section 5.8.

 

Absence of Certain Changes or Events

    A-36  

Section 5.9.

 

Compliance with Law

    A-36  

Section 5.10.

 

Investigations; Litigation

    A-37  

Section 5.11.

 

Information Supplied

    A-37  

Section 5.12.

 

Availability of Financing

    A-37  

Section 5.13.

 

Maintenance of 2015 Budget

    A-37  

Section 5.14.

 

Finders and Brokers

    A-37  

Section 5.15.

 

Stock Ownership

    A-37  

Section 5.16.

 

No Merger Sub Activity

    A-37  

Section 5.17.

 

Tax Matters

    A-38  

Section 5.18.

 

No Other Representations

    A-38  

ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE FIRST MERGER

   
A-38
 

Section 6.1.

 

Conduct of Business by the Company Pending the Closing

   
A-38
 

Section 6.2.

 

Conduct of Business by Parent Pending the Closing

    A-41  

Section 6.3.

 

Solicitation by the Company

    A-42  

ARTICLE VII ADDITIONAL AGREEMENTS

   
A-44
 

Section 7.1.

 

Access; Confidentiality; Notice of Certain Events

   
A-44
 

Section 7.2.

 

Reasonable Best Efforts

    A-46  

Section 7.3.

 

Financing

    A-46  

Section 7.4.

 

Publicity

    A-48  

Section 7.5.

 

Directors' and Officers' Insurance and Indemnification

    A-49  

Section 7.6.

 

Takeover Statutes

    A-50  

Section 7.7.

 

Obligations of Merger Subs

    A-50  

Section 7.8.

 

Employee Benefits Matters

    A-50  

Section 7.9.

 

Rule 16b-3

    A-52  

Section 7.10.

 

Security Holder Litigation

    A-52  

Section 7.11.

 

Delisting

    A-52  

Section 7.12.

 

Director Resignations

    A-52  

Section 7.13.

 

Certain Tax Matters

    A-52  

Section 7.14.

 

Stock Exchange Listing

    A-52  

Section 7.15.

 

14d-10 Matters

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Section 7.16.

 

Company and Product Name

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ARTICLE VIII CONDITIONS TO CONSUMMATION OF THE MERGERS

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Section 8.1.

 

Conditions to Each Party's Obligations to Effect the Mergers

   
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ARTICLE IX TERMINATION

   
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Section 9.1.

 

Termination

   
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Section 9.2.

 

Effect of Termination

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ARTICLE X MISCELLANEOUS

   
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Section 10.1.

 

Amendment and Modification; Waiver

   
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Section 10.2.

 

Non-Survival of Representations and Warranties

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Section 10.3.

 

Expenses

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Section 10.4.

 

Notices

    A-56  

Section 10.5.

 

Interpretation

    A-57  

Section 10.6.

 

Counterparts

    A-58  

Section 10.7.

 

Entire Agreement; Third-Party Beneficiaries

    A-58  

Section 10.8.

 

Severability

    A-58  

Section 10.9.

 

Governing Law; Jurisdiction

    A-58  

Section 10.10.

 

Waiver of Jury Trial

    A-59  

Section 10.11.

 

Assignment

    A-59  

Section 10.12.

 

Enforcement; Remedies

    A-59  

Section 10.13.

 

Waiver of Claims Against Financing Sources

    A-60  

Annex A

 

Certain Definitions

   
 
 

Annex B

 

Conditions to the Offer

   
 
 

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AGREEMENT AND PLAN OF REORGANIZATION

        This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), dated as of March 4, 2015, as amended March 22, 2015, is by and among AbbVie Inc., a Delaware corporation ("Parent"), Oxford Amherst Corporation, a Delaware corporation and a direct wholly owned subsidiary of Parent ("Purchaser"), Oxford Amherst LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent ("Merger Sub 2" and, together with Purchaser, the "Merger Subs"), and Pharmacyclics, Inc., a Delaware corporation (the "Company"). All capitalized terms used in this Agreement shall have the meanings ascribed to such terms in Annex A or as otherwise defined elsewhere in this Agreement unless the context clearly provides otherwise. Parent, each of the Merger Subs and the Company are each sometimes referred to herein as a "Party" and collectively as the "Parties".


RECITALS

        WHEREAS, it is proposed that Purchaser shall commence a tender offer (the "Offer") to acquire all of the outstanding shares of common stock, $0.0001 par value per share, of the Company (the "Company Common Stock" or, such shares, "Company Shares") for the consideration and upon the terms and subject to the conditions set forth herein;

        WHEREAS, it is also proposed that, as soon as practicable following the consummation of the Offer, the Parties wish to effect the acquisition of the Company by Parent through (a) the merger of Purchaser with and into the Company, with the Company being the surviving entity (the "First Merger") and (b) immediately following the First Merger, the merger of the Company, as the surviving entity of the First Merger, with and into Merger Sub 2, with Merger Sub 2 being the surviving entity (the "Second Merger" and, together with the First Merger, the "Mergers");

        WHEREAS, the First Merger will be governed by Section 251(h) of the DGCL and will be effected as soon as practicable following the consummation of the Offer upon the terms and subject to the conditions set forth herein;

        WHEREAS, in connection with the First Merger, each outstanding share of Company Common Stock issued and outstanding immediately prior to the First Effective Time (other than Cancelled Shares or Dissenting Shares) will be automatically converted into the right to receive the Merger Consideration upon the terms and conditions set forth in this Agreement and in accordance with the General Corporation Law of the State of Delaware (the "DGCL");

        WHEREAS, the Offer and the Mergers have been structured to qualify as a "reorganization" within the meaning of Section 368(a) of the Code when considered together;

        WHEREAS, the board of directors of the Company (the "Company Board of Directors") (i) unanimously determined that the terms of this Agreement and the transactions contemplated hereby (the "Transactions"), including the Offer and the First Merger in connection therewith are fair to, and in the best interests of, the Company and its stockholders, (ii) determined that it is in the best interests of the Company and its stockholders, and declared it advisable, to enter into this Agreement, (iii) approved the execution and delivery by the Company of this Agreement, the performance by the Company of its covenants and agreements contained herein and the consummation of the Offer, the Mergers and the other Transactions upon the terms and subject to the conditions contained herein and (iv) resolved to recommend that the holders of shares of Company Common Stock accept the Offer and tender their shares of Company Common Stock to Purchaser pursuant to the Offer (the "Company Board Recommendation");

        WHEREAS, the board of directors or sole member, as applicable, of Parent and each of the Merger Subs have approved this Agreement and determined that this Agreement and the Transactions, including the Offer, the Mergers and the issuance of Parent Common Stock in the Offer and the First

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Merger, are advisable and fair to, and in the best interests of, Parent and each of the Merger Subs and its stockholders or members, as applicable;

        WHEREAS, as an inducement to and condition of Parent's willingness to enter into this Agreement, concurrently with the entry of the parties into this Agreement, Robert W. Duggan is entering into a support agreement with Parent (the "Support Agreement"), pursuant to which, among other things, Mr. Duggan agrees to tender all Company Shares beneficially owned by him into the Offer; and

        WHEREAS, the Parties desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Mergers and also prescribe various conditions to the Offer and the Mergers.

        NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:


ARTICLE I

THE OFFER

        Section 1.1.    The Offer.     

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        Section 1.2.
    Company Actions.     

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ARTICLE II

THE MERGERS

        Section 2.1.    The Mergers.     Upon the terms and subject to the satisfaction or waiver of the conditions set forth in this Agreement, and in accordance with the DGCL (including Section 251(h) of the DGCL) and the Limited Liability Company Act of the State of Delaware (the "DLLCA"), (a) at the First Effective Time, Purchaser shall be merged with and into the Company, whereupon the separate existence of Purchaser will cease, with the Company surviving the First Merger (the Company, as the surviving entity in the First Merger, sometimes being referred to herein as the "First Surviving Corporation"), such that following the First Merger, the First Surviving Corporation will be a wholly owned direct subsidiary of Parent, and (b) immediately thereafter, and as part of the same plan, at the Second Effective Time, the First Surviving Corporation shall be merged with and into Merger Sub 2, whereupon the separate existence of the First Surviving Corporation will cease, with Merger Sub 2 surviving the Second Merger (Merger Sub 2, as the surviving entity of the Second Merger, sometimes being referred to herein as the "Surviving Company"), such that following the Second Merger, the Surviving Company will be a wholly owned direct subsidiary of Parent. The Mergers shall have the effects provided in this Agreement and as specified in the DGCL and the DLLCA, as applicable. The First Merger shall be governed by Section 251(h) of the DGCL.


        Section 2.2.
    Closing.     The closing of the Mergers (the "Closing") will take place at 10:00 a.m., Pacific Time, at the offices of Wilson Sonsini Goodrich & Rosati, P.C., One Market Plaza, Spear Tower, Suite 3300, San Francisco, California 94105, as promptly as practicable following the Acceptance Time (and on the same date on which the Acceptance Time occurs), subject to the satisfaction or (to the extent permitted by applicable Law) waiver of the conditions set forth in Article VIII (other than any such conditions which by their nature cannot be satisfied until the Closing Date, which shall be required to be so satisfied or (to the extent permitted by applicable Law) waived on the Closing Date), unless another date or place is agreed to in writing by the Company and Parent. The date on which the Closing actually takes place is referred to as the "Closing Date"). The parties shall take all necessary and appropriate actions to cause the Mergers to become effective immediately following the Acceptance Time, without a meeting of the stockholders of the Company, in accordance with Section 251(h) of the DGCL.


        Section 2.3.
    Effective Times.     On the Closing Date, the Parties shall cause (a) a certificate of merger with respect to the First Merger (the "First Certificate of Merger") to be duly executed and filed with the DSOS as provided under the DGCL and make any other filings, recordings or publications required to be made by the Company or Purchaser under the DGCL in connection with the First Merger, which shall be as soon as practicable after the Acceptance Time and (b) a certificate of merger with respect to the Second Merger (the "Second Certificate of Merger") to be duly executed and filed with the DSOS as provided under the DGCL and the DLLCA and make any other filings, recordings or publications required to be made by the First Surviving Corporation or Merger Sub 2 under the DGCL and the DLLCA in connection with the Second Merger. The First Merger shall become effective at such time as the First Certificate of Merger is duly filed with the DSOS or on such other date and time as shall be agreed to by the Company and Parent and specified in the First Certificate of Merger, which shall be as soon as is practicable after the Acceptance Time (such date and time being hereinafter referred to as the "First Effective Time"). The Second Merger shall become effective at such time as the Second Certificate of Merger is duly filed with the DSOS or on such other date and time as shall be agreed to by the Company and Parent and specified in the Second Certificate of Merger (such date and time being hereinafter referred to as the "Second Effective Time"). The First Effective Time shall, in all events, precede the Second Effective Time.

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        Section 2.4.
    Governing Documents.     


        Section 2.5.
    Officers, Directors and Managers of the Surviving Entities.     


        Section 2.6.
    Tax Consequences.     The Parties intend that, for U.S. federal income tax purposes, (a) the Offer and the Mergers, taken together, shall qualify as a "reorganization" within the meaning of Section 368(a) of the Code and (b) this Agreement, including any amendments thereto, be, and is hereby adopted as, the "plan of reorganization" involving the Offer and the Mergers for purposes of Sections 354 and 361 of the Code.


ARTICLE III

TREATMENT OF SECURITIES

        Section 3.1.    Treatment of Capital Stock.     

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        Section 3.2.
    Payment for Securities; Surrender of Certificates.     

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        Section 3.3.
    Dissenter's Rights.     

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        Section 3.4.
    Treatment of Company Equity Awards.     

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        Section 3.5.    Withholding.     Parent, the Merger Subs, the First Surviving Corporation and the Surviving Company shall be entitled to deduct and withhold, or cause the Exchange Agent to deduct and withhold, from the consideration otherwise payable to a holder of Company Common Stock or Company Equity Awards pursuant to this Agreement, any amounts as are required to be withheld or deducted with respect to such consideration under the Code, or any applicable provisions of state, local or foreign Tax Law. To the extent that amounts are so withheld and timely remitted to the appropriate Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Company Common Stock or Company Equity Awards in respect of which such deduction and withholding was made.


        Section 3.6.
    Fractional Shares.     No certificate or scrip representing fractional shares of Parent Common Stock shall be issued upon the surrender for exchange of Certificates or Book-Entry Shares, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a

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stockholder of Parent. Notwithstanding any other provision of this Agreement, each holder of Company Shares converted pursuant to the First Merger who would otherwise have been entitled to receive a fraction of a share of Parent Common Stock (after aggregating all shares represented by the Certificates and Book-Entry Shares delivered by such holder) shall receive, in lieu thereof, cash, without interest, in an amount equal to such fractional part of a share of Parent Common Stock multiplied by the Parent Trading Price.


ARTICLE IV

REPRESENTATIONS AND
WARRANTIES OF THE COMPANY

        Except as disclosed in the Company SEC Documents filed or furnished with the SEC since December 31, 2013 (including exhibits and other information incorporated by reference therein) and publicly available prior to the date hereof (but excluding any forward-looking disclosures set forth in any "risk factors" section, any disclosures in any "forward-looking statements" section and any other disclosures included therein to the extent they are predictive or forward-looking in nature), where the applicability of such disclosure as an exception to a particular representation is reasonably apparent on the face of such disclosure, or in the section or subsection of the disclosure letter delivered by the Company to Parent immediately prior to the execution of this Agreement (the "Company Disclosure Letter") that specifically corresponds to such section or subsection of this Article IV (or in any other section or subsection of this Article IV if the applicability of such disclosure to such section or subsection of this Article IV is reasonably apparent on the face of such disclosure), the Company represents and warrants to Parent as set forth below.


        Section 4.1.
    Qualification, Organization, Subsidiaries, etc.     


        Section 4.2.
    Capitalization.     

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        Section 4.3.
    Corporate Authority.     

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        Section 4.4.
    Governmental Consents; No Violation.     

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        Section 4.5.
    SEC Reports and Financial Statements.     


        Section 4.6.
    Internal Controls and Procedures.     The Company has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act. The Company's disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes Oxley Act"). Since January 1, 2013, the Company's principal executive officer and its principal financial officer have disclosed to the Company's auditors and the audit committee of the Company Board of Directors (a) all known significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect the Company's ability to record, process, summarize and report financial information and (b) any known fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls.


        Section 4.7.
    No Undisclosed Liabilities.     Neither the Company nor any Company Subsidiary has any liabilities of any nature, whether or not accrued, contingent or otherwise, that would be required by GAAP to be reflected on a consolidated balance sheet of the Company and its consolidated

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Subsidiaries (or in the notes thereto), except (a) as disclosed, reflected or reserved against in the Company's consolidated balance sheet (or the notes thereto) as of December 31, 2014 included in the Company SEC Documents filed or furnished on or prior to the date hereof, (b) for liabilities incurred in the ordinary course of business since December 31, 2014, (c) as expressly permitted or contemplated by this Agreement, (d) for liabilities which have been discharged or paid in full in the ordinary course of business, as of the date hereof and (e) for liabilities which, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.


        Section 4.8.
    Absence of Certain Changes or Events.     


        Section 4.9.
    Compliance with Laws; Permits.     


        Section 4.10.
    Environmental Laws and Regulations.     Except for such matters as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect: (a) the Company and the Company Subsidiaries are now and have been since December 31, 2013 in compliance with all, and have not violated any, applicable Environmental Laws; (b) since December 31, 2013, neither the Company nor any of the Company Subsidiaries has received any notice, demand letter, claim or request for information alleging that the Company or any of the Company Subsidiaries may be in violation of or subject to liability under any Environmental Law or are allegedly subject to any Removal, Remedial or Response actions; (c) neither the Company nor any of the Company Subsidiaries is subject to any order, decree, injunction or agreement with any Governmental Entity, or any indemnity or other agreement with any third party, imposing liability or obligations relating to any Environmental Law or any Hazardous Substance; and (d) the Company has all of the material Environmental Permits necessary for the conduct and operation of its business as now being conducted, and all such Environmental Permits are in good standing.

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        Section 4.11.
    Employee Benefit Plans.     

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        Section 4.12.    Regulatory Matters.     

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        Section 4.13.
    Tax Matters.     

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        Section 4.14.
    Labor Matters.     As of the date hereof, neither the Company nor any Company Subsidiary is a party to, or bound by, any collective bargaining agreement or other Contract with a labor union or labor organization. Neither the Company nor any Company Subsidiary is subject to a labor dispute, strike or work stoppage except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. There are no organizational efforts with respect to the formation of a collective bargaining unit presently being made or, to the knowledge of the Company, threatened involving employees of the Company or any Company Subsidiary, except for those the formation of which would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, there has not occurred and, to the knowledge of the Company, there is not threatened, any proceeding or suit against or affecting the Company or any Company Subsidiary relating to the alleged violation of any Laws pertaining to labor relations or employment matters, including any charge or complaint filed by an employee or union with the National Labor Relations Board, the Equal Employment Opportunity Commission, or any comparable Governmental Entity. Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the Company and each Company Subsidiary are in compliance with all applicable Laws respecting labor, employment, fair employment practices, terms and conditions of employment, applicant and employee background checking, immigration and required documentation, workers' compensation, occupational safety and health requirements, plant closings, wages and hours, worker classification, withholding of Taxes, employment discrimination, disability rights or benefits, equal opportunity, labor relations, employee leave issues and unemployment insurance and related matters.

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        Section 4.15.
    Investigation; Litigation.     As of the date hereof, (a) there is no investigation or review pending (or, to the knowledge of the Company, threatened) by any Governmental Entity with respect to the Company or any Company Subsidiary or any of their respective properties, rights or assets, and (b) there are no claims, actions, suits or proceedings pending (or, to the knowledge of the Company, threatened) against the Company or any Company Subsidiary or any of their respective properties, rights or assets before, and there are no orders, judgments or decrees of, any Governmental Entity, which, in the case of clause (a) or (b), would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.


        Section 4.16.
    Intellectual Property.     

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        Section 4.17.
    Real Property.     Neither the Company nor any Company Subsidiary owns any real property. Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) each material lease, sublease and other agreement under which the Company or any of its Subsidiaries uses or occupies or has the right to use or occupy any material real property at which the material operations of the Company and its Subsidiaries are conducted as of the date hereof (the "Company Leased Real Property"), is valid, binding and in full force and effect, subject to the Enforceability Limitations and (ii) no uncured default of a material nature on the part of the Company or, if applicable, its Subsidiary or, to the knowledge of the Company, the landlord thereunder exists with respect to any Company Leased Real Property. Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company and each of its Subsidiaries has a good and valid leasehold interest in or contractual right to use or occupy, subject to the terms of the lease, sublease or other agreement applicable thereto, the Company Leased Real Property, free and clear of all Liens, except for the Permitted Liens.


        Section 4.18.
    Material Contracts.     

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        Section 4.19.    Insurance.     Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, as of the date hereof, (a) all current, material insurance policies and Contracts of the Company and the Company Subsidiaries are in full force and effect and are valid and enforceable and cover against the risks as are customary in all material respects for companies of similar size in the same or similar lines of business, (b) all premiums due thereunder have been paid and (c) there has been no material erosion of applicable limits thereunder. Neither the Company nor any of the Company Subsidiaries has received notice of cancellation or termination with respect to any material third party insurance policies or Contracts (other than in connection with normal renewals of any such insurance policies or Contracts).


        Section 4.20.
    Information Supplied.     The information relating to the Company and the Company Subsidiaries to be contained in the Offer Documents, the Schedule 14D-9 and the Form S-4 will not, on the date the Offer Documents and the Schedule 14D-9 (and any amendment or supplement thereto) are first mailed to the stockholders of the Company or at the time the Form S-4 (and any amendment or supplement thereto) is filed with the SEC, is declared effective or is mailed to the holders of Company Shares, or on the date that the Offer is consummated, contain any untrue statement of any material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading. The Schedule 14D-9 will comply in all material respects as to form with the requirements of the Exchange Act and the rules and regulations promulgated thereunder. Notwithstanding the foregoing provisions of this Section 4.20, no representation or warranty is made by the Company with respect to information or statements made or incorporated by reference in the Offer Documents, the Schedule 14D-9, or the Form S-4 which were not supplied by or on behalf of the Company.


        Section 4.21.
    Opinions of Financial Advisor.     The Company Board of Directors has received (i) the opinion of Centerview Partners LLC to the effect that, as of the date of such opinion, and subject to the assumptions and limitations set forth therein, the aggregate Merger Consideration to be paid to the holders of Company Shares (other than Cancelled Shares, Dissenting Shares and any Company Shares held by any affiliate of Parent) is fair from a financial point of view, to such holder,

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and (ii) the opinion of J.P. Morgan Securities LLC, dated the date of this Agreement, as to the fairness, from a financial point of view, of the aggregate Merger Consideration to be received by the stockholders of the Company.


        Section 4.22.
    State Takeover Statutes.     Assuming the accuracy of Parent's representations and warranties in the first sentence of Section 5.15, (i) the Company Board of Directors has taken all action necessary to render inapplicable to this Agreement and the Transactions Section 203 of the DGCL and any similar provisions in the Company Governing Documents or any other Takeover Statute and (ii) to the knowledge of the Company, no other Takeover Statute is applicable to the Transactions.


        Section 4.23.
    Finders and Brokers.     Other than Centerview Partners LLC and J.P. Morgan Securities LLC, neither the Company nor any Company Subsidiary has employed any investment banker, broker or finder in connection with the Transactions who might be entitled to any fee or any commission in connection with this Agreement or upon consummation of the Offer or the Mergers.


        Section 4.24.
    No Other Representations.     Except for the representations and warranties contained in Article IV, the Company acknowledges that neither Parent nor any Representative of Parent makes, and the Company acknowledges that it has not relied upon or otherwise been induced by, any other express or implied representation or warranty with respect to Parent or with respect to any other information provided or made available to the Company in connection with the Transactions, including any information, documents, projections, forecasts or other material made available to the Company or to the Company's Representatives in certain "data rooms" or management presentations in expectation of the Transactions.


ARTICLE V

REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUBS

        Except as disclosed in the Parent SEC Documents (but excluding any forward looking disclosures set forth in any "risk factors" section, any disclosures in any "forward looking statements" Section and any other disclosures included therein to the extent they are predictive or forward looking in nature), where the applicability of such disclosure as an exception to a particular representation is reasonably apparent on the face of such disclosure, or in section or subsection of the disclosure letter delivered by Parent to the Company immediately prior to the execution of this Agreement (the "Parent Disclosure Letter") that specifically corresponds to such section or subsection of this Article V (or in any other section or subsection of this Article V if the applicability of such disclosure to such section or subsection of this Article V is reasonably apparent on the face of such disclosure), Parent and Merger Subs jointly and severally represent and warrant to the Company as set forth below.


        Section 5.1.
    Qualification, Organization, Subsidiaries, etc.     

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        Section 5.2.
    Capitalization.     


        Section 5.3.
    Corporate Authority.     

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        Section 5.4.
    Governmental Consents; No Violation.     


        Section 5.5.
    SEC Reports and Financial Statements.     

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        Section 5.6.
    Internal Controls and Procedures.     Parent has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act. Parent's disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by Parent in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to Parent's management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. Since January 1, 2013, Parent's principal executive officer and its principal financial officer have disclosed to Parent's auditors and the audit committee of the Parent Board of Directors (a) all known significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect Parent's ability to record, process, summarize and report financial information and (b) any known fraud, whether or not material, that involves management or other employees who have a significant role in Parent's internal controls.


        Section 5.7.
    No Undisclosed Liabilities.     Neither Parent nor any Parent Subsidiary has any liabilities of any nature, whether or not accrued, contingent or otherwise, that would be required by GAAP to be reflected on a consolidated balance sheet of Parent and its consolidated Subsidiaries (or in the notes thereto), except (a) as disclosed, reflected or reserved against in Parent's consolidated balance sheet (or the notes thereto) as of February 15, 2015 included in Parent SEC Documents filed or furnished on or prior to the date hereof, (b) liabilities incurred in the ordinary course of business since February 15, 2015, (c) as expressly permitted or contemplated by this Agreement, (d) for liabilities which have been discharged or paid in full in the ordinary course of business, as of the date hereof, and (e) for liabilities which, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect.


        Section 5.8.
    Absence of Certain Changes or Events.     


        Section 5.9.
    Compliance with Law.     

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        Section 5.10.
    Investigations; Litigation.     As of the date hereof, (a) there is no investigation or review pending (or, to the knowledge of Parent, threatened) by any Governmental Entity with respect to Parent or any of Parent's Subsidiaries or any of their respective properties, rights or assets, and (b) there are no claims, actions, suits or proceedings pending (or, to the knowledge of Parent, threatened) against Parent or any of Parent's Subsidiaries or any of their respective properties, rights or assets before, and there are no orders, judgments or decrees of, any Governmental Entity, which, in the case of clause (a) or (b), would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.


        Section 5.11.
    Information Supplied.     The information relating to Parent, its Subsidiaries, and the Merger Subs to be contained in the Offer Documents, the Schedule 14D-9 and the Form S-4 will not, on the date the Offer Documents and the Schedule 14D-9 (and any amendment or supplement thereto) are first mailed to stockholders of the Company or at the time the Form S-4 (and any amendment or supplement thereto) is filed with the SEC, is declared effective or is mailed to the holders of the Company Shares, contain any untrue statement of any material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading. The Offer Documents and the Form S-4 will comply in all material respects as to form with the requirements of both the Exchange Act and the Securities Act and the rules and regulations promulgated thereunder. Notwithstanding the foregoing provisions of this Section 5.11, no representation or warranty is made by Parent with respect to information or statements made or incorporated by reference in the Offer Documents, the Schedule 14D-9, or the Form S-4 which were not supplied by or on behalf of Parent


        Section 5.12.
    Availability of Financing.     Parent has, or will have available to it as of the Acceptance Time and at the Closing, sufficient cash to enable Purchaser to consummate the transactions contemplated by this Agreement, including payment of the Cash Consideration at the Acceptance Time and the Merger Consideration at the Closing, and to pay all related fees and expenses of Parent, Purchaser and Merger Sub 2.


        Section 5.13.
    Maintenance of 2015 Budget.     Parent has reviewed the Company's annual operating budget for fiscal year 2015 made available to Parent prior to the date hereof, and Parent currently intends to provide the Surviving Company with at least the amount of resources contemplated by such annual operating budget.


        Section 5.14.
    Finders and Brokers.     Other than Morgan Stanley & Co. LLC, neither Parent nor any of its Subsidiaries has employed any investment banker, broker or finder in connection with the Transactions who might be entitled to any fee or any commission in connection with or upon consummation of the Offer and the Mergers.


        Section 5.15.
    Stock Ownership.     Parent is not, nor at any time for the past three years has been, an "interested stockholder" of the Company as defined in Section 203 of the DGCL. Neither Parent nor any Parent Subsidiaries directly or indirectly owns, and at all times for the past three years, neither Parent nor any Parent Subsidiaries has owned, beneficially or otherwise, any Company Shares.


        Section 5.16.
    No Merger Sub Activity.     Since the date of their formation, the Merger Subs have not engaged in any activities other than in connection with this Agreement.

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        Section 5.17.    Tax Matters.     Neither Parent nor Merger Subs has knowledge of any facts or has taken or agreed to take any action that would reasonably be expected to prevent or impede the Offer and the Mergers, taken together, from qualifying as a "reorganization" within the meaning of Section 368(a) of the Code.


        Section 5.18.
    No Other Representations.     Except for the representations and warranties contained in Article IV, Parent acknowledges that neither the Company nor any Representative of the Company makes, and Parent acknowledges that it has not relied upon, any other express or implied representation or warranty with respect to the Company or any of its Subsidiaries or with respect to any other information provided or made available to Parent in connection with the Transactions, including any information, documents, projections, forecasts or other material made available to Parent or to Parent's Representatives in certain "data rooms" or management presentations in expectation of the Transactions.


ARTICLE VI

COVENANTS RELATING TO CONDUCT OF BUSINESS
PENDING THE FIRST MERGER

        Section 6.1.    Conduct of Business by the Company Pending the Closing.     The Company agrees that between the date of this Agreement and date of the First Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 9.1, except (a) as set forth in Section 6.1 of the Company Disclosure Letter, (b) as specifically permitted or required by this Agreement, (c) as required by Law or (d) as consented to in writing (including via email from the person named under Section 10.5 to receive notices on behalf of Parent hereunder) by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company (i) shall and shall cause each Company Subsidiary to, conduct its business in all material respects in the ordinary course of business consistent with past practice, including by using commercially reasonable efforts to preserve intact its and their present business organizations and to preserve its and their present relationships with customers, suppliers, Governmental Entities and other Persons with whom it and they have material business relations; provided, however, that no action that is expressly permitted by any of clauses (a) through (p) of Section 6.1(ii) shall be deemed a breach of this clause (i), and (ii) agrees that between the date of this Agreement and the First Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 9.1, the Company shall not, and shall not permit any Company Subsidiary to:

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        Section 6.2.
    Conduct of Business by Parent Pending the Closing.     Parent agrees that between the date of this Agreement and the date of the First Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 9.1, except (a) as set forth in Section 6.2 of the Parent Disclosure Letter, (b) as specifically required by this Agreement, (c) as required by Law or (d) as consented to in writing (including via email from the person named in Section 10.5 to receive notices on behalf of the Company hereunder) by the Company (which consent shall not be unreasonably withheld, delayed or conditioned), Parent (i) shall and shall cause each Parent Subsidiary to, conduct its business in all material respects in the ordinary course of business consistent with past practice, including by using commercially reasonable efforts to preserve intact its and their present business organizations and to preserve its and their present relationships with customers, suppliers, Governmental Entities and other Persons with whom it and they have material business relations; provided, however, that no action that is expressly permitted by any of clauses (a) through (g) of Section 6.2(ii) shall be deemed a breach of this clause (i), and (ii) agrees that between the date of this Agreement and the First Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 9.1, Parent shall not, and shall not permit any Parent Subsidiary to:

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        Section 6.3.
    Solicitation by the Company.     

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ARTICLE VII

ADDITIONAL AGREEMENTS

        Section 7.1.    Access; Confidentiality; Notice of Certain Events.     

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        Section 7.2.    Reasonable Best Efforts.     


        Section 7.3.
    Financing.     

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        Section 7.4.
    Publicity.     So long as this Agreement is in effect, neither the Company nor Parent, nor any of their respective affiliates or Representatives, shall issue or cause the publication of any press release or other public announcement with respect to the Offer, the Mergers or this Agreement without the prior consent of the other Party, unless such Party determines, after consultation with outside counsel, that it is required by applicable Law or by any listing agreement with or the listing rules of a national securities exchange or trading market to issue or cause the publication of any press release or other public announcement with respect to the Offer, the Mergers or this Agreement, in which event such Party shall endeavor, on a basis reasonable under the circumstances, to provide a meaningful opportunity to the other Party to review and comment upon such press release or other announcement in advance and shall give due consideration to all reasonable additions, deletions or changes suggested thereto; provided, however, that the Company shall not be required by this Section 7.4 to provide any such review or comment to Parent in connection with the receipt and existence of an Acquisition Proposal or a Change of Recommendation and matters related thereto;

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provided, further, that the Parties shall not be required by this Section 7.4 to provide any such review or comment to the other Party to the event of any dispute between the Parties relating to this Agreement; provided, further, each Party and their respective affiliates or Representatives may make statements that are not inconsistent with previous press releases, public disclosures or public statements made by Parent and the Company in compliance with this Section 7.4.


        Section 7.5.
    Directors' and Officers' Insurance and Indemnification.     

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        Section 7.6.
    Takeover Statutes.     The Parties shall use their respective reasonable best efforts (a) to take all action necessary so that no Takeover Statute is or becomes applicable to the Offer, the Mergers, the Support Agreement or any of the other Transactions and (b) if any such Takeover Statute is or becomes applicable to any of the foregoing, to take all action necessary so that the Offer, the Mergers, the Support Agreement and the other Transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to eliminate or minimize the effect of such Takeover Statute on the Offer, the Mergers, the Support Agreement and the other Transactions. No Change of Recommendation shall change the approval of the Company Board of Directors for purposes of causing any Takeover Statute to be applicable to the Offer, the Mergers, the Support Agreement or any of the other Transactions.


        Section 7.7.
    Obligations of Merger Subs.     Parent shall take all action necessary to cause each of the Merger Subs, the First Surviving Corporation and the Surviving Company to perform their respective obligations under this Agreement and to consummate the Transactions, including the Offer and the Mergers, upon the terms and subject to the conditions set forth in this Agreement.


        Section 7.8.
    Employee Benefits Matters.     

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        Section 7.9.
    Rule 16b-3.     Prior to the First Effective Time, the Company and Parent shall, as applicable, take all such steps as may be reasonably necessary or advisable hereto to cause any dispositions of Company equity securities (including derivative securities) and acquisitions of Parent equity securities pursuant to the Transactions contemplated by this Agreement by each individual who is a director or officer of the Company subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.


        Section 7.10.
    Security Holder Litigation.     Each Party shall provide the other Party prompt notice of any litigation brought by any stockholder of that Party against such Party, any of its Subsidiaries and/or any of their respective directors relating to the Offer, the Mergers, this Agreement or any of the Transactions, and shall keep the other party informed on a prompt and timely basis with respect to the status thereof. The Company shall give Parent the opportunity to participate (at Parent's expense) in the defense or settlement of any such litigation, and no such settlement shall be agreed to without the Parent's prior written consent, which consent shall not be unreasonably withheld or delayed, except that Parent shall not be obligated to consent to any settlement which does not include a full release of Parent and its affiliates or which imposes an injunction or other equitable relief after the First Effective Time upon Parent or any of its affiliates. In the event of, and to the extent of, any conflict or overlap between the provisions of this Section 7.10 and Section 6.1 or Section 7.2, the provisions of this Section 7.10 shall control.


        Section 7.11.
    Delisting.     Each of the Parties agrees to cooperate with the other Parties in taking, or causing to be taken, all actions necessary to delist the Company Common Stock from the Nasdaq and terminate its registration under the Exchange Act, in each case, as promptly as practicable after the First Effective Time, provided that such delisting and termination shall not be effective until after the First Effective Time.


        Section 7.12.
    Director Resignations.     The Company shall use its reasonable best efforts to cause to be delivered to Parent resignations executed by each director of the Company in office as of immediately prior to the First Effective Time and effective upon the First Effective Time.


        Section 7.13.
    Certain Tax Matters.     Each of the Parties shall use its reasonable best efforts to cause the Offer and the Mergers, taken together, to qualify as a "reorganization" within the meaning of Section 368(a) of the Code, including by executing and delivering customary tax representation letters to the Company's and/or Parent's counsel, as applicable, in form and substance reasonably satisfactory to such counsel, in connection with (i) any tax opinion or description of the U.S. federal income tax consequences of the Offer and the Mergers contained or set forth in the Form S-4 or (ii) the tax opinions required by the conditions to the offer set forth in clauses (F)(5)(i) and (F)(5)(ii) of Annex B. None of the Parties shall (and each of the Parties shall cause their respective Subsidiaries not to) take any action, or fail to take any action, that could reasonably be expected to cause the Offer and the Mergers, taken together, to fail to qualify as a "reorganization" within the meaning of Section 368(a) of the Code. The Parties intend to report and, except to the extent otherwise required by Law, shall report, for federal income tax purposes, the Offer and the Mergers, taken together as a "reorganization" within the meaning of Section 368(a) of the Code.


        Section 7.14.
    Stock Exchange Listing.     Parent shall use its reasonable best efforts to cause the shares of Parent Common Stock to be issued in the First Merger to be approved for listing on the Parent Stock Exchange, subject to official notice of issuance, prior to the Acceptance Time.


        Section 7.15.
    14d-10 Matters.     The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of the Company, including the Company Benefit Plans (collectively, the "Arrangements"), to certain holders of Company Shares and holders of Company Equity Awards. The Compensation Committee of the Company Board of Directors (the

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"Company Compensation Committee") (A) at a meeting to be held prior to the Acceptance Time, will duly adopt resolutions approving as an "employment compensation, severance or other employee benefit arrangement" within the meaning of Rule 14d-10(d)(1) under the Exchange Act (1) each Arrangement presented to the Company Compensation Committee on or prior to the date hereof, (2) the treatment of the Company Equity Awards, as applicable, in accordance with the terms set forth in this Agreement, and (3) the terms of Section 7.5 and Section 7.8, and (B) will take all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. Each member of the Company Compensation Committee is an "independent director" in accordance with the requirements of Rule 14d 10(d)(2) under the Exchange Act.


        Section 7.16.
    Company and Product Name.     For a period of five (5) years after the Closing, Parent shall cause (and shall cause its affiliates and any future acquiror of the Surviving Company or all or substantially all of assets to): (a) maintain the name of the Surviving Company as "Pharmacyclics", (b) maintain the Surviving Company as the primary operating entity which owns and markets Imbruvica® (ibrutinib) in the United States (it being understood that Parent may elect to utilize an entity or entities through which Imbruvica® (ibrutinib) will be owned and marketed, other than the Surviving Company, to facilitate Parent's tax planning and legal entity management so long as Parent causes any entity that holds the product rights, including the New Drug Application, for Imbruvica® (ibrutinib) in the US to contain "Pharmacyclics" in its legal name), and (c) market the Company's Imbruvica® (ibrutinib) (and any future versions thereof) in the United States under the "Imbruvica®" trade name, in greater size and prominence than any other company trade name on such products, and display, on all packaging materials, labels and promotional materials relating to such products in the United States, the "Imbruvica®" trade name in that manner; provided, that, nothing in this Section 7.16 will restrict Parent and its Subsidiaries from taking any action (i) reasonably required to comply with applicable Law, (ii) necessary in the reasonable judgment of Parent's Board of Directors to exercise its fiduciary duties or (iii) reasonably required to comply with any agreement of the Company and its Subsidiaries in effect as of the date hereof. Any holder or "group" (as defined in Section 13(d)(3) of the Exchange Act) of holders of Company Shares who beneficially owned 15% or more of the outstanding Company Shares as of immediately prior to the Acceptance Time shall be express third party beneficiaries of this Section 7.16.


ARTICLE VIII

CONDITIONS TO CONSUMMATION OF THE MERGERS

        Section 8.1.    Conditions to Each Party's Obligations to Effect the Mergers.     The respective obligations of each Party to effect the Mergers shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any and all of which may be waived in whole or in part by Parent, the Merger Subs and the Company, as the case may be, to the extent permitted by applicable Law:

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ARTICLE IX

TERMINATION

        Section 9.1.    Termination.     This Agreement may be terminated and the Offers, the Mergers and the other Transactions may be abandoned, at any time before the Acceptance Time, as follows:

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        Section 9.2.
    Effect of Termination.     

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ARTICLE X

MISCELLANEOUS

        Section 10.1.    Amendment and Modification; Waiver.     


        Section 10.2.
    Non-Survival of Representations and Warranties.     None of the representations and warranties in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the First Effective Time. This Section 10.2 shall not limit any covenant or agreement of the Parties which by its terms contemplates performance after the First Effective Time.


        Section 10.3.
    Expenses.     Except as otherwise expressly provided in this Agreement, all Expenses incurred in connection with this Agreement and the Transactions shall be paid by the Party incurring such Expenses.


        Section 10.4.
    Notices.     All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally (notice deemed given upon receipt), telecopied (notice deemed given upon confirmation of receipt) or sent by a nationally recognized overnight courier

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service, such as Federal Express (notice deemed given upon receipt of proof of delivery), to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):

        if to Parent or the Merger Subs, to:

AbbVie Inc.
1 North Waukegan Road
North Chicago, Illinois 60064-6400
Attention:   Laura J. Schumacher, Executive Vice President, Business Development, External Affairs and General Counsel
Facsimile:   (847) 935-3294

        with a copy to:

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention:   Edward D. Herlihy
    David C. Karp
David K. Lam
Facsimile:   (212) 403-2000

        and

        if to the Company, to:

Pharmacyclics, Inc.
995 E. Arques Avenue
Sunnyvale, California 94085-4521
Attention:   Robert W. Duggan
Facsimile:   (408) 774-0340

with a copy to:

Wilson Sonsini Goodrich & Rosati P.C.
One Market Plaza, Spear Tower, Suite 3300
San Francisco, CA 94105
Attention:   Robert T. Ishii and Denny Kwon
Facsimile:   (415) 947-2099


        Section 10.5.
    Interpretation.     When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words "include", "includes" or "including" are used in this Agreement they shall be deemed to be followed by the words "without limitation." As used in this Agreement, the term "affiliates" shall have the meaning set forth in Rule 12b-2 of the Exchange Act. The table of contents and headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision hereof. When reference is made herein to a Person, such reference shall be deemed to include all direct and indirect Subsidiaries of such Person unless otherwise indicated or the context otherwise requires. All references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such Person unless otherwise indicated or the context otherwise requires. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

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        Section 10.6.
    Counterparts.     This Agreement may be executed manually or by facsimile by the Parties, in any number of counterparts, each of which shall be considered one and the same agreement and shall become effective when a counterpart hereof shall have been signed by each of the Parties and delivered to the other Parties.


        Section 10.7.
    Entire Agreement; Third-Party Beneficiaries.     


        Section 10.8.
    Severability.     If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Offers and the Mergers is not affected in any manner adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the Offers and the Mergers are fulfilled to the extent possible.


        Section 10.9.
    Governing Law; Jurisdiction.     

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        Section 10.10.
    Waiver of Jury Trial.     EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE MERGERS AND OTHER TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (INCLUDING THE FINANCING). EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10.


        Section 10.11.
    Assignment.     This Agreement shall not be assigned by any of the Parties (whether by operation of Law or otherwise) without the prior written consent of the other Parties. Subject to the preceding sentence, but without relieving any Party of any obligation hereunder, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.


        Section 10.12.
    Enforcement; Remedies.     

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        Section 10.13.
    Waiver of Claims Against Financing Sources.     None of the Financing Sources shall have any liability to the Company or its affiliates (other than Parent and its Subsidiaries (other than the Company and its Subsidiaries)) relating to or arising out of this Agreement or the Transactions, including the financing of the Transactions, whether at law or equity, in contract, in tort or otherwise, and neither the Company nor any of its affiliates (other than Parent and its Subsidiaries (other than the Company and its Subsidiaries)) will have any rights or claims against any Financing Sources under this Agreement and any other agreement contemplated by, or entered into in connection with, the Transactions, including any commitments by the Financing Sources in respect of financing the Transactions. Notwithstanding anything herein to the contrary, in no event shall the Company or its affiliates (other than Parent and its Subsidiaries (other than the Company and its Subsidiaries)) be entitled to seek the remedy of specific performance of this Agreement against any of the Financing Sources, nor shall the Parent or its affiliates have any obligation to any Party to enforce any commitments, or other agreement, by any of the Financing Sources in respect of financing the Transactions.

(Remainder of Page Intentionally Left Blank)

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        IN WITNESS WHEREOF, Parent, the Merger Subs and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.

    ABBVIE INC.

 

 

By

 

/s/ WILLIAM J. CHASE

        Name:   William J. Chase
        Title:   Chief Financial Officer and Executive Vice President

 

 

OXFORD AMHERST CORPORATION

 

 

By

 

/s/ WILLIAM J. CHASE

        Name:   William J. Chase
        Title:   President

 

 

OXFORD AMHERST LLC

 

 

By

 

/s/ WILLIAM J. CHASE

        Name:   William J. Chase
        Title:   Manager

 

 

PHARMACYCLICS, INC.

 

 

By

 

/s/ ROBERT W. DUGGAN

        Name:   Robert W. Duggan
        Title:   Chairman and CEO

   

[Signature Page to Agreement and Plan of Reorganization]


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Annex A

Certain Defined Terms

        For the purposes of this Agreement, the term:

        "Acceptable Confidentiality Agreement" means a confidentiality agreement that contains terms that are no less favorable in the aggregate to the Company, as applicable, than those contained in the Confidentiality Agreement and that expressly permits the Company's compliance with the provisions of this Agreement; provided, however, that an Acceptable Confidentiality Agreement shall not be required to contain standstill provisions.

        "Antitrust Laws" mean any antitrust, competition or trade regulation Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening competition through merger or acquisition, including the HSR Act.

        "Acquisition Proposal" means any offer, proposal or indication of interest from a Person or group (other than a proposal or offer by Parent or any of its Subsidiaries) at any time relating to a any transaction or series of related transactions (other than the transactions contemplated by this Agreement) involving: (i) any acquisition or purchase by any Person or group, directly or indirectly, of more than twenty percent (20%) of any class of outstanding equity securities of the Company, or any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any Person or group beneficially owning more than twenty percent (20%) of any class of outstanding equity securities of the Company; (ii) any merger, consolidation, share exchange, business combination, joint venture, recapitalization, reorganization or other similar transaction involving the Company and a Person or group pursuant to which the stockholders of the Company immediately preceding such transaction hold less than eighty percent (80%) of the equity interests in the surviving or resulting entity of such transaction; or (iii) any sale, lease (other than in the ordinary course of business), exchange, transfer or other disposition to a Person or group of more than twenty percent (20%) of the consolidated assets of the Company and the Company Subsidiaries (measured by the fair market value thereof).

        "business days" means any day, other than a Saturday, Sunday and any day which is a legal holiday under the Laws of the State of California or New York or is a day on which banking institutions located in such States are authorized or required by applicable Law or other governmental action to close.

        "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and any regulations promulgated thereunder.

        "Code" means the Internal Revenue Code of 1986, as amended.

        "Company Bylaws" means the bylaws of the Company, as amended and restated as of the date of this Agreement.

        "Company Certificate" means the Certificate of Incorporation of the Company as amended, amended and restated and supplemented and in effect on the date hereof.

        "Company Equity Awards" means the Company Stock Options and Company RSUs.

        "Company Equity Plans" means the Company's 2014 Equity Incentive Award Plan, 2004 Equity Incentive Award Plan and the Company's 1995 Stock Option Plan.

        "Company Governing Documents" means the Company Bylaws and the Company Certificate.

        "Company Material Adverse Effect" means any Effect that, individually or in the aggregate, has a material adverse effect on the condition (financial or otherwise), business, assets or operations of the Company and the Company Subsidiaries, taken as a whole, or on the Company's assets associated with

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Imbruvica® (ibrutinib); provided, however, that no Effects resulting or arising from the following shall be deemed to constitute a Company Material Adverse Effect or shall be taken into account when determining whether a Company Material Adverse Effect exists or has occurred or is reasonably likely to exist or occur: (a) any changes in general United States or global economic conditions, (b) conditions (or changes therein) in any industry or industries in which the Company operates, (c) general legal, tax, economic, political and/or regulatory conditions (or changes therein), including any changes affecting financial, credit or capital market conditions, (d) any change in GAAP or interpretation thereof, (e) any adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal of any applicable Law of or by any Governmental Entity, (f) any actions expressly required by, or the failure to take any action expressly prohibited by, the terms of this Agreement, (g) any failure by the Company to meet any internal or published projections, estimates or expectations of the Company's revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the Company to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from the definition of a "Company Material Adverse Effect" may be taken into account), (h) Effects arising out of changes in geopolitical conditions, acts of terrorism or sabotage, war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions or other force majeure events, including any material worsening of such conditions threatened or existing as of the date of this Agreement, (i) any matter disclosed in the Company Disclosure Letter, where the applicability of such disclosure as an exception to a particular representation is reasonably apparent on the face of such disclosure, (j) the execution and delivery of this Agreement or the consummation of the Transactions, or the public announcement of this Agreement or the Transactions, including any litigation arising out of or relating to this Agreement or the Transactions or the events leading thereto (provided that this clause (j) shall not apply to any representation or warranty to the extent the purpose of such representation or warranty is to address the consequences resulting from the execution and delivery of this Agreement or the consummation of the Transactions) and (k) any action or failure to take any action that is consented to or requested by Parent in writing, provided that with respect to the exceptions set forth in clauses (a), (b), (c), (d), (e), and (h), such Effect shall be taken into account in the determination of whether a Company Material Adverse Effect has occurred solely to the extent such Effect materially and disproportionately affected the Company relative to other participants in the industry in which the Company operates.

        "Company Product" means all products that are being researched, tested, developed, commercialized, manufactured, sold or distributed by the Company or any Company Subsidiary and all products with respect to which the Company or any Company Subsidiary has royalty rights.

        "Company RSU" means each outstanding restricted stock unit and any associated rights to the issuance of additional Company Common Stock granted under a Company Equity Plan that is outstanding immediately prior to the First Effective Time.

        "Company Stock Option" means each option to purchase Company Common Stock granted under any Company Equity Plan that is outstanding and unexercised immediately prior to the First Effective Time.

        "Company Subsidiaries" means the Subsidiaries of the Company.

        "Confidentiality Agreement" means the Confidentiality Agreement, dated January 22, 2015, between Parent and the Company, as amended.

        "Contract" means any written or oral agreement, contract, subcontract, settlement agreement, lease, sublease, binding understanding, note, option, bond, mortgage, indenture, trust document, loan

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or credit agreement, license, sublicense, insurance policy or other legally binding commitment or undertaking of any nature, as in effect as of the date hereof.

        "DSOS" means the Secretary of State of the State of Delaware.

        "Effect" means any change, effect, development, circumstance, condition, state of facts, event or occurrence.

        "Environmental Law" means any and all applicable Laws which (a) regulate or relate to the protection or clean-up of the environment; the use, treatment, storage, transportation, handling, disposal or release of Hazardous Substances, the preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources; or the health and safety of persons or property, including protection of the health and safety of employees; or (b) impose liability or responsibility with respect to any of the foregoing, including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), or any other Law of similar effect.

        "Environmental Liability" means any obligations or liabilities (including any notices, claims, complaints, suits or other assertions of obligations or liabilities) that are: (a) related to the environment (including on-site or off-site contamination by Hazardous Substances of surface or subsurface soil or water); and (b) based upon (i) any provision of Environmental Laws or (ii) any order, consent, decree, writ, injunction or judgment issued or otherwise imposed by any Governmental Entity and includes: fines, penalties, judgments, awards, settlements, losses, damages, costs, fees (including attorneys' and consultants' fees), expenses and disbursements relating to environmental matters; defense and other responses to any administrative or judicial action (including notices, claims, complaints, suits and other assertions of liability) relating to environmental matters; and financial responsibility for (x) clean-up costs and injunctive relief, including any Removal, Remedial or Response actions, and (y) compliance or remedial measures under other Environmental Laws.

        "Environmental Permits" means any material permit, license, authorization or approval required under applicable Environmental Laws.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated and rulings issued thereunder.

        "ERISA Affiliate" means, with respect to any entity, trade or business, any other entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same "controlled group" as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

        "Exchange Act" means the United States Securities Exchange Act of 1934, as amended.

        "Excluded Contracts" means any and all (i) licenses for computer software and/or other Intellectual Property that is generally available to the public, (ii) non disclosure or confidentiality agreements; (iii) Contracts with contractors or vendors providing services to the Company (including any consulting arrangements, sponsored research arrangements, Contracts with contract research organizations, master services Contracts and non-exclusive distribution arrangements), (iv) material transfer Contracts (other than Contracts with any academic or research institution pursuant to which patentable Intellectual Property was created and a patent application was filed relating thereto), (v) Contracts relating to the clinical development of any Company Product (including any clinical trial agreement) (other than clinical trial agreements relating to pivotal trials sponsored by the Company or any Company Subsidiary) and (vi) intra-company Contract between the Company and any of the Company Subsidiaries or between Company Subsidiaries.

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        "Expenses" means all reasonable out-of-pocket expenses (including all fees and expenses of counsel, financing sources, accountants, investment bankers, experts and consultants to a Party and its affiliates) incurred by a Party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement, the preparation, printing, filing and mailing of the Offer Documents, Schedule 14D-9, the Form S-4, any other filings with the SEC and all other matters related to the closing of the Offers, the Mergers and the other Transactions.

        "Financing Sources" means any Person (other than Parent or any of its Affiliates) that has committed to provide or otherwise entered into agreements in connection with the Financing and the parties to any joinder agreements, indentures or credit agreements entered pursuant thereto or relating thereto, each together with their respective former, current and future equityholders, controlling persons, Representatives, Affiliates, members, managers, general or limited partners or successors or assignees of such Persons and/or their respective Affiliates, successors and assigns.

        "Governmental Entity" means (a) any national, federal, state, county, municipal, local, or foreign government or any entity exercising executive, legislative, judicial, regulatory, taxing, or administrative functions of or pertaining to government, (b) any public international governmental organization, or (c) any agency, division, bureau, department, or other political subdivision of any government, entity or organization described in the foregoing clauses (a) or (b) of this definition.

        "Hazardous Substances" means any pollutant, chemical, substance and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or flammable chemical, chemical compound, hazardous substance, material or waste, whether solid, liquid or gas, that is subject to regulation, control or remediation under any Environmental Laws, including any quantity of petroleum product or byproduct, solvent, flammable or explosive material, radioactive material, asbestos, lead paint, polychlorinated biphenyls (or PCBs), dioxins, dibenzofurans, heavy metals, radon gas, mold, mold spores, and mycotoxins.

        "HSR Act" means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

        "Indebtedness" means with respect to any Person, all obligations of such Person (a) for borrowed money, whether secured or unsecured, (b) evidenced by notes, bonds, debentures or similar Contracts, (c) in respect of outstanding letters of credit, and (d) in respect of any guarantee (other than customary non-recourse carve-out or "badboy" guarantees), keepwell or similar arrangement for any of the foregoing.

        "Intellectual Property" means all rights in or to all U.S. or foreign: (a) inventions (whether or not patentable), patents and patent applications and any other governmental grant for the protection of inventions or industrial designs, (b) trademarks, service marks, trade dress, logos, brand names, trade names and corporate names, whether registered or unregistered, and the goodwill associated therewith, together with any registrations and applications for registration thereof, (c) copyrights, whether registered or unregistered, and any registrations and applications for registration thereof, (d) trade secrets and confidential information, including know-how, concepts, methods, processes, designs, schematics, drawings, formulae, technical data, specifications, research and development information, technology, and business plans, (e) domain name registrations and (f) extensions, reissues, registrations, renewals, reexaminations and applications relating to any of the foregoing.

        "Intervening Event" means an event, fact, development or occurrence (other than any event, fact, development or occurrence resulting from a material breach of this Agreement by the Company) that was not known to the Company Board of Directors as of the date hereof and becomes known to the Company Board of Directors after the date hereof and prior to the Acceptance Time; provided, however, that the receipt, existence or terms of an Acquisition Proposal or any matter relating thereto or consequence thereof shall not constitute an Intervening Event.

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        "knowledge" will be deemed to be, as the case may be, the actual knowledge of (a) the Persons listed in Section A of the Parent Disclosure Letter with respect to Parent or the Merger Subs, or (b) the Persons listed in Section A of the Company Disclosure Letter with respect to the Company.

        "Law" means any law, requirement, statute, code, rule, regulation, order, ordinance, judgment or decree or other pronouncement of any Governmental Entity.

        "Lien" means any lien, pledge, hypothecation, mortgage, security interest, encumbrance, claim, option, right of first refusal, preemptive right, community property interest or restriction of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, or any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).

        "Nasdaq" means the Nasdaq Capital Market.

        "NYSE Rule" means Rule 312.03 of the New York Stock Exchange's Listed Company Manual.

        "Parent Equity Plans" means the Parent 2013 Incentive Stock Program.

        "Parent Material Adverse Effect" means any Effect that, individually or in the aggregate, has a material adverse effect on the condition (financial or otherwise), business, assets or operations of Parent and the Parent Subsidiaries, taken as a whole; provided, however, that no Effects resulting or arising from the following shall be deemed to constitute a Parent Material Adverse Effect or shall be taken into account when determining whether a Parent Material Adverse Effect exists or has occurred or is reasonably likely to exist or occur: (a) any changes in general United States or global economic conditions, (b) conditions (or changes therein) in any industry or industries in which Parent operates, (c) general legal, tax, economic, political and/or regulatory conditions (or changes therein), including any changes affecting financial, credit or capital market conditions, (d) any change in GAAP or interpretation thereof, (e) any adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal of any applicable Law of or by any Governmental Entity, (f) any actions expressly required by, or the failure to take any action expressly prohibited by, the terms of this Agreement, (g) any failure by Parent to meet any internal or published projections, estimates or expectations of Parent's revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by Parent to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from the definition of a "Parent Material Adverse Effect" may be taken into account), (h) Effects arising out of changes in geopolitical conditions, acts of terrorism or sabotage, war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions or other force majeure events, including any material worsening of such conditions threatened or existing as of the date of this Agreement, (i) any matter disclosed in the Parent Disclosure Letter, where the applicability of such disclosure as an exception to a particular representation is reasonably apparent on the face of such disclosure, (j) the execution and delivery of this Agreement or the consummation of the Transactions, or the public announcement of this Agreement or the Transactions, including any litigation arising out of or relating to this Agreement or the Transactions or the events leading thereto (provided that this clause (j) shall not apply to any representation or warranty to the extent the purpose of such representation or warranty is to address the consequences resulting from the execution and delivery of this Agreement or the consummation of the Transactions) and (k) any action or failure to take any action that is consented to or requested by the Company in writing, provided that with respect to the exceptions set forth in clauses (a), (b), (c), (d), (e), and (h), such Effect shall be taken into account in the determination of whether a Parent Material Adverse Effect has occurred solely to the extent such Effect materially and disproportionately affected Parent relative to other participants in the industry in which Parent operates.

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        "Parent Common Stock" means the common stock, $0.01 par value per share, of Parent.

        "Parent Subsidiaries" means the Subsidiaries of Parent.

        "Parent Stock Exchange" means the New York Stock Exchange.

        "Parent Trading Price" means the volume weighted average sale price per share of Parent Common Stock as reported on the Parent Stock Exchange for the ten (10) consecutive trading days ending on and including the second trading day prior to the expiration date of the Offer, as calculated by Bloomberg Financial LP under the function "ABBV UN Equity AQR" (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).

        "Permitted Liens" means any Lien (i) for Taxes or governmental assessments, charges or claims of payment not yet due and payable or are being contested in good faith through appropriate proceedings and for which adequate accruals or reserves have been established, (ii) which is a carriers', warehousemen's, mechanics', materialmen's, repairmen's or other similar Lien arising in the ordinary course of business, (iii) which is disclosed on the most recent consolidated balance sheet of the Company or notes thereto or securing liabilities reflected on such balance sheet or (iv) which are not material in amount and would not reasonably be expected to materially impair the continued use of the applicable property for the purposes for which the property is currently being used.

        "Person" means a natural person, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Entity or other entity or organization.

        "RCRA" means the Resource Conservation and Recovery Act, as amended, and any regulations promulgated thereunder.

        "Release" means any intentional or unintentional spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, placing, discarding, abandonment, or disposing into the environment (including the placing, discarding or abandonment of any barrel, container or other receptacle containing any Hazardous Substance or other material).

        "Removal, Remedial or Response" actions include the types of activities covered by CERCLA, RCRA, and other comparable Environmental Laws, and whether such activities are those which might be taken by a Governmental Entity or those which a Governmental Entity or any other Person might seek to require of waste generators, handlers, distributors, processors, users, storers, treaters, owners, operators, transporters, recyclers, reusers, disposers, or other Persons under "removal," "remedial," or other "response" actions.

        "Representatives" means, when used with respect to any Person, the directors, officers, employees, consultants, financial advisors, accountants, legal counsel, investment bankers, and other agents, advisors and representatives of such Person and its Subsidiaries.

        "SEC" means the United States Securities and Exchange Commission.

        "Securities Act" means the United States Securities Act of 1933, as amended.

        "Subsidiary" or "Subsidiaries" means with respect to any Person, any corporation, limited liability company, partnership or other organization, whether incorporated or unincorporated, of which (a) at least a majority of the outstanding shares of capital stock of, or other equity interests, having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries or (b) with respect to a partnership, such Person or any other Subsidiary of such Person is a general partner of such partnership.

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        "Superior Proposal" means an Acquisition Proposal (with references to 20% and 80% being deemed to be replaced with references to 50%), which the Company Board of Directors determines in good faith after consultation with the Company's outside legal and financial advisors to be more favorable to the stockholders of the Company than the Offer and the Mergers, taking into account all relevant factors (including all the terms and conditions of such proposal or offer and this Agreement, and any changes to the terms of this Agreement proposed by Parent pursuant to Section 6.3).

        "Takeover Statutes" mean any "business combination," "control share acquisition," "fair price," "moratorium" or other takeover or anti-takeover statute or similar Law.

        "Tax" or "Taxes" means any and all taxes, levies, duties, tariffs, imposts and other similar charges and fees imposed by any Governmental Entity or domestic or foreign taxing authority, including, income, franchise, windfall or other profits, gross receipts, premiums, property, sales, use, net worth, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation, excise, withholding, ad valorem, stamp, transfer, value-added, gains tax and license, registration and documentation fees, severance, occupation, environmental, customs duties, disability, real property, personal property, registration, alternative or add-on minimum, or estimated tax, including any interest, penalty, additions to tax or additional amounts imposed with respect thereto, whether disputed or not.

        "Tax Return" means any report, return, certificate, claim for refund, election, estimated tax filing or declaration required to be filed with any Governmental Entity or domestic or foreign taxing authority with respect to Taxes, including any schedule or attachment thereto, and including any amendments thereof.

        "Total Consideration" means the aggregate amount of all Stock Consideration, Cash Consideration and Mixed Consideration payable to holders of Company Common Stock as a result of the Transactions, including in connection with the Offer and the Merger.

        "Unvested Company RSU" means each Company RSU other than a Vested Company RSU.

        "Unvested Company Stock Option" means each Company Stock Option other than a Vested Company Stock Option.

        "Vested Company RSU" means each Company RSU that is vested and unsettled as of immediately prior to the First Effective Time (after taking into account any vesting acceleration in the applicable Company Equity Plan, in any award agreement or other agreement, plan, policy, or arrangement applicable to such Company RSUs, or in such Company RSUs, by reason of this Agreement or the Transactions).

        "Vested Company Stock Option" means each Company Stock Option that is vested as of immediately prior to the First Effective Time (after taking into account any vesting acceleration in the applicable Company Equity Plan, in any award agreement or other agreement, plan, policy, or arrangement applicable to such Company Stock Option, or in such Company Stock Options, by reason of this Agreement or the Transactions).

        "Willful Breach" means a deliberate act or a deliberate failure to act, taken or not taken with the actual knowledge that such act or failure to act constitutes in and of itself a material breach of this Agreement, regardless of whether breaching was the object of the act or failure to act.

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        Terms Defined Elsewhere The following terms are defined elsewhere in this Agreement, as indicated below:

401(k) Termination Date   Section 7.8(c)
Acceptance Time   Section 1.1(f)
Acquisition Proposal   Section 9.2(b)(i)
Agreement   Preamble
Arrangements   Section 7.15
Book-Entry Shares   Section 3.2(b)
Cancelled Shares   Section 3.1(b)
Cash Consideration   Section 1.1(a)
Cash Election   Section 1.1(c)(i)
Cash Election Shares   Section 1.1(c)(i)
Certificates   Section 3.2(b)
Change of Recommendation   Section 6.3(a)
Closing   Section 2.2
Closing Date   Section 2.2
COBRA   Section 4.11(b)
Company   Preamble
Company Benefit Plans   Section 4.11(a)
Company Board of Directors   RECITALS
Company Board Recommendation   RECITALS
Company Capitalization Date   Section 4.2(a)
Company Common Stock   RECITALS
Company Compensation Committee   Section 7.15
Company Disclosure Letter   Article IV
Company Healthcare Laws   Section 4.12(b)
Company Leased Real Property   Section 4.17
Company Permits   Section 4.9(b)
Company Preferred Stock   Section 4.2(a)
Company Regulatory Agency   Section 4.12(a)
Company Regulatory Permits   Section 4.12(a)
Company SEC Documents   Section 4.5(a)
Company Shares   RECITALS
Continuing Employees   Section 7.8(a)
D&O Insurance   Section 7.5(c)
Delayed Payment Date   Section 3.4(a)
DGCL   RECITALS
Dissenting Shares   Section 3.3(a)
DLLCA   Section 2.1
DOJ   Section 7.2(b)
Election   Section 1.1(c)(i)
Election Deadline   Section 3.1(e)(i)
Enforceability Limitations   Section 4.3(c)
ESPP   Section 3.4(d)
Exchange Agent   Section 3.2(a)
Exchange Fund   Section 3.2(a)
FDA   Section 4.12(a)
FDCA   Section 4.12(a)
Financing   Section 7.3(a)
First Certificate of Merger   Section 2.3

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First Effective Time   Section 2.3
First Merger   RECITALS
First Surviving Corporation   Section 2.1
Form of Election in Merger   Section 3.1(e)(i)
Form of Election in Offer   Section 1.1(c)(i)
Form S-4   Section 1.1(g)(ii)
Fractional Share Consideration   Section 3.1(a)
FTC   Section 7.2(b)
GAAP   Section 4.5(b)
Indemnified Parties   Section 7.5(a)
Mailing Date   Section 3.1(e)(i)
Material Contract   Section 4.18(a)
Maximum Cash Shares in Merger   Section 3.1(e)(iii)(1)
Maximum Cash Shares in Offer   Section 1.1(c)(iii)(1)
Maximum Stock Shares in Merger   Section 3.1(e)(iii)(3)
Merger Cash Proration Factor   Section 3.1(e)(iii)(2)
Merger Consideration   Section 3.1(a)
Merger Stock Proration Factor   Section 3.1(e)(iii)(4)
Merger Sub 2   Preamble
Merger Subs   Preamble
Mergers   RECITALS
Minimum Condition   Section 1.1(a)(i)
Mixed Consideration   Section 1.1(a)
Mixed Election   Section 1.1(c)(i)
Mixed Election Shares   Section 1.1(c)(i)
No Election Share   Section 1.1(c)(vii)
Offer   RECITALS
Offer Cash Proration Factor   Section 1.1(c)(iii)(2)
Offer Documents   Section 1.1(g)(i)(1)
Offer Stock Proration Factor   Section 1.1(c)(iii)(4)
Offer to Purchase   Section 1.1(a)
Offering Period   Section 3.4(d)
Option Cash Payment   Section 3.4(a)
Outside Date   Section 9.1(b)
Parent   Preamble
Parent Capitalization Date   Section 5.2(a)
Parent Disclosure Letter   Article V
Parent Equity Awards   Section 5.2(b)
Parent Governing Documents   Section 5.1(a)
Parent Permits   Section 5.9(b)
Parent Preferred Stock   Section 5.2(a)
Parent SEC Documents   Section 5.5(a)
Parties   Preamble
Party   Preamble
PHSA   Section 4.12(a)
Preliminary Prospectus   Section 1.1(g)(ii)
Purchaser   Preamble
Purchaser Shares   Section 3.1(c)
RSU Cash Payment   Section 3.4(b)
Sarbanes Oxley Act   Section 4.6
Schedule TO   Section 1.1(g)(i)(1)

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Schedule 14D-9   Section 1.2(b)
Second Certificate of Merger   Section 2.3
Second Effective Time   Section 2.3
Second Merger   RECITALS
Service Provider   Section 6.1(c)
Stock Consideration   Section 1.1(a)
Stock Election   Section 1.1(c)(i)
Stock Election Shares   Section 1.1(c)(i)
Stockholder List Date   Section 1.2(c)
Support Agreement   RECITALS
Surviving Company   Section 2.1
Termination Fee   Section 9.2(b)(i)
Transactions   RECITALS

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Annex B

Conditions to the Offer

        Notwithstanding any other provisions of the Offer, but subject to compliance with the terms and conditions of that certain Agreement and Plan of Reorganization, dated as of March 4, 2015 (the "Agreement") by and among AbbVie Inc., a Delaware corporation ("Parent"), Oxford Amherst Corporation, a Delaware corporation and a direct wholly owned subsidiary of Parent ("Purchaser"), Oxford Amherst LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent ("Merger Sub 2" and, together with Purchaser, the "Merger Subs") and Pharmacyclics, Inc., a Delaware corporation (the "Company") (capitalized terms that are used but not otherwise defined in this Annex B shall have the respective meanings ascribed thereto in the Agreement), and in addition to (and not in limitation of) the obligations of Purchaser to extend the Offer pursuant to the terms and conditions of the Agreement, Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC (including Rule 14e-1(c) promulgated under the Exchange Act (relating to the obligation of Purchaser to pay for or return tendered Company Shares promptly after termination or withdrawal of the Offer)), pay for any Company Shares that are validly tendered in the Offer and not withdrawn prior to the expiration of the Offer in the event that, at or prior to the expiration of the Offer:

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* * *

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ANNEX B

LOGO


 

 

Centerview Partners LLC
31 West 52nd Street
New York, NY 10019
March 4, 2015

The Board of Directors
Pharmacyclics, Inc.
995 East Arques Avenue
Sunnyvale, California 94085

The Board of Directors:

        You have requested our opinion as to the fairness, from a financial point of view, to the holders of the outstanding shares of common stock, par value $.0001 per share (the "Company Shares") (other than Excluded Shares, as defined below), of Pharmacyclics, Inc., a Delaware corporation (the "Company"), of the Merger Consideration (as defined below) proposed to be paid to such holders pursuant to the Agreement and Plan of Reorganization proposed to be entered into (the "Agreement") by and among AbbVie Inc., a Delaware corporation ("Parent"), Oxford Amherst Corporation, a Delaware corporation and a direct wholly owned subsidiary of Parent ("Purchaser"), Oxford Amherst LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent ("Merger Sub 2" and, together with Purchaser, the "Merger Subs"), and the Company. The Agreement provides that:

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        The "Parent Trading Price" means the volume weighted average closing sale price of one share of Parent Common Stock as reported on the New York Stock Exchange for the ten (10) consecutive trading days ending on the trading day immediately preceding the time that the Purchaser accepts for payment, and pays for, all Company Shares that are validly tendered and not withdrawn in the Offer (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events). The aggregate Mixed Consideration together with the aggregate Cash Consideration and the aggregate Stock Consideration to be paid to the holders of Company Shares (other than Excluded Shares) in the Transaction, taken together (and not separately), is referred to as the "Merger Consideration". The Merger Consideration will be subject to certain proration procedures as set forth in the Agreement, as to which we express no view or opinion. The terms and conditions of the Transaction are more fully set forth in the Agreement.

        We have acted as financial advisor to the Board of Directors of the Company in connection with the Transaction. We will receive a fee for our services in connection with the Transaction, a portion of which is payable upon the rendering of this opinion and a substantial portion of which is contingent upon the consummation of the Transaction. In addition, the Company has agreed to reimburse certain of our expenses arising, and indemnify us against certain liabilities that may arise, out of our engagement.

        We are a securities firm engaged directly and through affiliates and related persons in a number of investment banking, financial advisory and merchant banking activities. In the past two years, we have not provided any financial advisory or other services to the Company or Parent for which we have received any compensation. We may provide investment banking and other services to or with respect to the Company or Parent or their respective affiliates in the future, for which we may receive compensation. Certain (i) of our and our affiliates' directors, officers, members and employees, or family members of such persons, (ii) of our affiliates or related investment funds and (iii) investment funds or other persons in which any of the foregoing may have financial interests or with which they may co-invest, may at any time acquire, hold, sell or trade, in debt, equity and other securities or financial instruments (including derivatives, bank loans or other obligations) of, or investments in, the Company, Parent or any of their respective affiliates, or any other party that may be involved in the Transaction.

        In connection with this opinion, we have reviewed, among other things: (i) a draft of the Agreement dated March 4, 2015 (the "Draft Agreement"); (ii) Annual Reports on Form 10-K of the Company for the years ended December 31, 2014, 2013 and 2012 and Annual Reports on Form 10-K of Parent for the years ended December 31, 2014, 2013 and 2012; (iii) certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company and Parent; (iv) certain publicly available research analyst reports for the Company and Parent; (v) certain other communications from the Company and Parent to their respective stockholders; (vi) certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of the Company, including certain financial forecasts, analyses and projections relating to the Company prepared by management of the Company and furnished to us by the Company for purposes of our analysis (the "Company Forecasts") (collectively, the "Company Internal Data"); and (vii) certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of Parent (the "Parent Internal Data"). We have conducted discussions with members of the senior management and

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representatives of the Company and Parent regarding their assessment of the Company Internal Data, the Parent Internal Data, as appropriate, and the strategic rationale for the Transaction. In addition, we reviewed publicly available financial and stock market data, including valuation multiples, for the Company and compared that data with similar data for certain other companies, the securities of which are publicly traded, in lines of business that we deemed relevant. We also compared certain of the proposed financial terms of the Transaction with the financial terms, to the extent publicly available, of certain other transactions that we deemed relevant and conducted such other financial studies and analyses and took into account such other information as we deemed appropriate.

        We have assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by us for purposes of this opinion and have, with your consent, relied upon such information as being complete and accurate. In that regard, we have assumed, at your direction, that the Company Internal Data (including, without limitation, the Company Forecasts) have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to the matters covered thereby, and we have relied, at your direction, on the Company Internal Data for purposes of our analysis and this opinion. We express no view or opinion as to the Company Internal Data or the assumptions on which it is based. In addition, at your direction, we have not made any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of the Company or Parent, nor have we been furnished with any such evaluation or appraisal, and we have not been asked to conduct, and did not conduct, a physical inspection of the properties or assets of the Company or Parent. We have assumed, at your direction, that the final executed Agreement will not differ in any respect material to our analysis or this opinion from the Draft Agreement reviewed by us. We have also assumed, at your direction, that the Transaction will be consummated on the terms set forth in the Agreement and in accordance with all applicable laws and other relevant documents or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to our analysis or this opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Transaction, no delay, limitation, restriction, condition or other change, including any divestiture requirements or amendments or modifications, will be imposed, the effect of which would be material to our analysis or this opinion. We have further assumed, at your direction, that the Transaction will qualify for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, without adjustment to the relative mix of Cash Consideration and Stock Consideration. We have not evaluated and do not express any opinion as to the solvency or fair value of the Company or Parent, or the ability of the Company or Parent to pay their respective obligations when they come due, or as to the impact of the Transaction on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. We are not legal, regulatory, tax or accounting advisors, and we express no opinion as to any legal, regulatory, tax or accounting matters.

        We express no view as to, and our opinion does not address, the Company's underlying business decision to proceed with or effect the Transaction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available to the Company or in which the Company might engage. This opinion is limited to and addresses only the fairness, from a financial point of view, as of the date hereof, to the holders of the Company Shares (other than Excluded Shares) of the Merger Consideration to be paid to such holders pursuant to the Agreement. We have not been asked to, nor do we express any view on, and our opinion does not address, any other term or aspect of the Agreement or the Transaction, including, without limitation, the structure or form of the Transaction, or any other agreements or arrangements contemplated by the Agreement (including the Support Agreement, as defined in the Agreement) or entered into in connection with or otherwise contemplated by the Transaction, including, without limitation, (i) the fairness of the Transaction or any other term or aspect of the Transaction to, or any consideration to be received in

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connection therewith by, or the impact of the Transaction on, the holders of any other class of securities, creditors or other constituencies of the Company or any other party, (ii) the allocation of the Merger Consideration as among holders of Company Shares who receive the Cash Consideration, the Stock Consideration or the Mixed Consideration, or (iii) the relative fairness of the Cash Consideration, the Stock Consideration and the Mixed Consideration. In addition, we express no view or opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of the Company or any party, or class of such persons in connection with the Transaction, whether relative to the Merger Consideration to be paid to holders of Company Shares (other than Excluded Shares) pursuant to the Agreement or otherwise. Our opinion is necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to us as of, the date hereof, and we do not have any obligation or responsibility to update, revise or reaffirm this opinion based on circumstances, developments or events occurring after the date hereof. We express no view or opinion as to what the value of the Parent Common Stock actually will be when issued pursuant to the Transaction or the prices at which the Company Shares or Parent Common Stock will trade or otherwise be transferable at any time, including following the announcement or consummation of the Transaction. Our opinion does not constitute a recommendation to any stockholder of the Company as to whether or not such holder should tender Company Shares in connection with the Offer, or how such stockholder or other person should otherwise act with respect to the Transaction or any other matter, including, without limitation, whether such stockholder should elect to receive the Cash Consideration, the Stock Consideration or the Mixed Consideration, or make no election, in the Transaction.

        Our financial advisory services and the opinion expressed herein are provided for the information and assistance of the members of the Board of Directors of the Company (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transaction. The issuance of this opinion was approved by the Centerview Partners LLC Fairness Opinion Committee.

        Based upon and subject to the foregoing, including the various assumptions and limitations set forth herein, we are of the opinion, as of the date hereof, that the Merger Consideration to be paid to the holders of Company Shares (other than Excluded Shares) pursuant to the Agreement is fair, from a financial point of view, to such holders.

    Very truly yours,

 

 

/s/ Centerview Partners LLC
CENTERVIEW PARTNERS LLC

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ANNEX C

   
LOGO
   

March 4, 2015

The Board of Directors
Pharmacyclics, Inc.
995 E. Arques Avenue
Sunnyvale, California 94085

Members of the Board of Directors:

        You have requested our opinion as to the fairness, from a financial point of view, to the holders of common stock, par value $0.0001 per share (the "Company Common Stock"), of Pharmacyclics, Inc., a Delaware corporation (the "Company"), of the consideration to be paid to such holders in the proposed Transaction (as defined below) with AbbVie Inc., a Delaware corporation ("Parent"). Pursuant to the Agreement and Plan of Reorganization (the "Agreement"), to be entered into among the Company, Parent, Oxford Amherst Corporation, a Delaware corporation and a direct wholly owned subsidiary of Parent ("Purchaser") and Oxford Amherst LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent ("Merger Sub 2" and, together with Purchaser, the "Merger Subs"), the following will occur:

        The Tender Offer and the Merger, together and not separately, are referred to herein as the "Transaction."

        In connection with preparing our opinion, we have (i) reviewed a draft dated March 4, 2015 of the Agreement; (ii) reviewed certain publicly available business and financial information concerning the

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Company and Parent and the industries in which they operate; (iii) compared the proposed financial terms of the Transaction with the publicly available financial terms of certain transactions involving companies we deemed relevant and the consideration paid for such companies; (iv) compared the financial and operating performance of the Company and Parent with publicly available information concerning certain other companies we deemed relevant and reviewed the current and historical market prices of the Company Common Stock and the Parent Common Stock and certain publicly traded securities of such other companies; (v) reviewed certain internal financial analyses and forecasts prepared by the management of the Company relating to its business; and (vi) performed such other financial studies and analyses and considered such other information as we deemed appropriate for the purposes of this opinion.

        In addition, we have held discussions with certain members of the management of the Company and Parent with respect to certain aspects of the Transaction, and the past and current business operations of the Company and Parent, the financial condition and future prospects and operations of the Company and Parent, the effects of the Transaction on the financial condition and future prospects of the Company and Parent, and certain other matters we believed necessary or appropriate to our inquiry.

        In giving our opinion, we have relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with us by the Company and Parent or otherwise reviewed by or for us, and we have not independently verified (nor have we assumed responsibility or liability for independently verifying) any such information or its accuracy or completeness. We have not conducted or been provided with any valuation or appraisal of any assets or liabilities, nor have we evaluated the solvency of the Company, Parent or the Merger Subs under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to us or derived therefrom, we have assumed that they have been reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of the Company and Parent to which such analyses or forecasts relate. We express no view as to such analyses or forecasts or the assumptions on which they were based. We have also assumed that the Transaction and the other transactions contemplated by the Agreement will qualify as a tax-free reorganization for United States federal income tax purposes and will be consummated as described in the Agreement, and that the definitive Agreement will not differ in any material respects from the draft thereof furnished to us. We have also assumed that the representations and warranties made by the Company, Parent and the Merger Subs in the Agreement and the related agreements are and will be true and correct in all respects material to our analysis. We are not legal, regulatory or tax experts and have relied on the assessments made by advisors to the Company with respect to such issues. We have further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction will be obtained without any adverse effect on the Company, Parent or the Merger Subs or on the contemplated benefits of the Transaction.

        Our opinion is necessarily based on economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. It should be understood that subsequent developments may affect this opinion and that we do not have any obligation to update, revise, or reaffirm this opinion. Our opinion is limited to the fairness, from a financial point of view, of the Consideration to be paid to the holders of the Company Common Stock in the proposed Transaction and we express no opinion as to the fairness of any consideration paid in connection with the Transaction to the holders of any other class of securities, creditors or other constituencies of the Company or as to the underlying decision by the Company to engage in the Transaction. Furthermore, we express no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the Transaction, or any class of such persons relative to the Consideration to be paid to the holders of the Company Common Stock in the Transaction or with

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respect to the fairness of any such compensation. We are expressing no opinion herein as to the price at which the Company Common Stock or the Parent Common Stock will trade at any future time.

        We have acted as financial advisor to the Company with respect to the proposed Transaction and will receive a fee from the Company for our services, a substantial portion of which will become payable only if the proposed Transaction is consummated. In addition, the Company has agreed to indemnify us for certain liabilities arising out of our engagement. During the two years preceding the date of this letter, we and our affiliates have had commercial or investment banking relationships with the Company and Parent, for which we and such affiliates have received customary compensation. Such services during such period have included acting as bookrunner on the Company's equity offering in March 2013, as financial advisor to Parent in connection with its proposed acquisition of Shire plc in July 2014, as bookrunner and administrative agent on Parent's bridge financing in connection with such proposed acquisition in July 2014, as financial advisor to Parent in connection with certain strategic planning (other than the Transaction) in January 2015 and as bookrunner and arranger for Parent's revolving credit facility in October 2014. In addition, our commercial banking affiliate is an agent bank and a lender under outstanding credit facilities of Parent, for which it receives customary compensation or other financial benefits. In the ordinary course of our businesses, we and our affiliates may actively trade the debt and equity securities of the Company or Parent for our own account or for the accounts of customers and, accordingly, we may at any time hold long or short positions in such securities.

        On the basis of and subject to the foregoing, it is our opinion as of the date hereof that the Consideration to be paid to the holders of the Company Common Stock in the proposed Transaction is fair, from a financial point of view, to such holders.

        The issuance of this opinion has been approved by a fairness opinion committee of J.P. Morgan Securities LLC. This letter is provided to the Board of Directors of the Company (in its capacity as such) in connection with and for the purposes of its evaluation of the Transaction. This opinion does not constitute a recommendation to any shareholder of the Company as to whether such shareholder should tender its shares in the Tender Offer or how such shareholder should vote with respect to the Transaction or any other matter, including, without limitation, whether any shareholder should elect to receive the Mixed Election Consideration, the Cash Election Consideration or the Stock Election Consideration or make no election in the Transaction. This opinion may not be disclosed, referred to, or communicated (in whole or in part) to any third party for any purpose whatsoever except with our prior written approval. This opinion may be reproduced in full in any proxy or information statement mailed to shareholders of the Company but may not otherwise be disclosed publicly in any manner without our prior written approval.

Very truly yours,

/s/ J.P. Morgan Securities LLC
J.P. MORGAN SECURITIES LLC

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ANNEX D

DIRECTORS AND EXECUTIVE OFFICERS OF ABBVIE AND THE OFFEROR

        The name, current principal occupation or employment and material occupations, positions, offices or employment for the past five years of each director and executive officer of AbbVie and the Offeror are set forth below. Unless otherwise indicated below, the current business address of each director and officer is c/o AbbVie Inc., 1 North Waukegan Road, North Chicago, Illinois 60064. Unless otherwise indicated below, the current business telephone number of each director and officer is (847) 937-6100.

        Where no date is shown, the individual has occupied the position indicated since at least January 1, 2013, when AbbVie became an independent company as a result of the distribution by Abbott Laboratories ("Abbott") of 100% of the outstanding common stock of AbbVie to Abbott's shareholders. Unless otherwise indicated, each occupation set forth opposite the name of an officer or director of AbbVie refers to a position with AbbVie, and each occupation set forth opposite the name of an officer or director of Oxford Amherst Corporation (the "Offeror") refers to a position with the Offeror.

        During the past five years, none of the directors and officers of AbbVie or the Offeror listed below has (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. Unless otherwise indicated below, each such person is a citizen of the United States of America.

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Directors and Executive Officers of AbbVie

Name/Age
  Title   Present Principal Occupation and Five-Year Employment History

Richard A. Gonzalez, 61

  Chairman of the Board and Chief Executive Officer, AbbVie Inc.   Mr. Gonzalez is the chairman and chief executive officer of AbbVie. He served as Abbott's executive vice president of the pharmaceutical products group from July 2010 to December 2012, and was responsible for Abbott's worldwide pharmaceutical business, including commercial operations, research and development, and manufacturing. He also served as president, Abbott Ventures Inc., Abbott's medical technology investment arm, from 2009 to 2011. Mr. Gonzalez joined Abbott in 1977 and held various management positions before briefly retiring in 2007, including: Abbott's president and chief operating officer; president, chief operating officer of Abbott's Medical Products Group; senior vice president and president of Abbott's former Hospital Products Division (now Hospira, Inc.); vice president and president of Abbott's Health Systems Division; and divisional vice president and general manager for Abbott's Diagnostics Operations in the United States and Canada. As a result of his service as Abbott's executive vice president, Pharmaceutical Products Group since July 2010, his previous service as Abbott's president and chief operating officer and his more than 30-year career at Abbott, Mr. Gonzalez has developed valuable business, management and leadership experience, as well as extensive knowledge of AbbVie and its global operations. Mr. Gonzalez's experience and knowledge enable him to contribute to AbbVie's board key insights into strategic, management, and operational matters.

Robert J. Alpern, M.D., 64

 

Director

 

Dr. Alpern has served as the Ensign Professor of Medicine, Professor of Internal Medicine, and Dean of Yale School of Medicine since June 2004. From July 1998 to June 2004, Dr. Alpern was the Dean of The University of Texas Southwestern Medical Center. Dr. Alpern also serves as a director of Abbott Laboratories and as a director on the Board of Yale—New Haven Hospital. As the Ensign Professor of Medicine, Professor of Internal Medicine, and Dean of Yale School of Medicine, Dean of The University of Texas Southwestern Medical Center, and as a director on the Board of Yale—New Haven Hospital, Dr. Alpern contributes valuable insights to the board through his medical and scientific expertise and his knowledge of the health care environment and the scientific nature of AbbVie's key research and development initiatives.

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Name/Age
  Title   Present Principal Occupation and Five-Year Employment History

Roxanne S. Austin, 54

 

Director

 

Ms. Austin is president of Austin Investment Advisors, a private investment and consulting firm, a position she has held since 2004. From July 2009 through July 2010, Ms. Austin also served as the president and chief executive officer of Move Networks, Inc., a provider of Internet television services. Ms. Austin previously served as president and chief operating officer of DIRECTV,  Inc. Ms. Austin also previously served as executive vice president and chief financial officer of Hughes Electronics Corporation and as a partner of Deloitte & Touche LLP. Ms. Austin is also a director of Abbott Laboratories, Target Corporation, Teledyne Technologies, Inc. and Telefonaktiebolaget LM Ericsson. Through her extensive management and operating roles, including her financial roles, Ms. Austin contributes significant oversight and leadership experience, including financial expertise and knowledge of financial statements, corporate finance and accounting matters.

William H.L. Burnside, 63

 

Director

 

Mr. Burnside is a retired senior vice president and director at The Boston Consulting Group (BCG), where he currently serves as an advisor. Prior to becoming managing partner of BCG's Los Angeles office in 1987, he worked in BCG's London and Chicago offices, servicing clients in telecommunications, media, defense, financial services, and manufacturing. Mr. Burnside is a director at Executive Service Corps of Southern California and Audubon California. Through his experience with The Boston Consulting Group, Mr. Burnside acquired knowledge and understanding of corporate finance and capital markets matters, as well as global and domestic strategic advisory experience across a broad base of industries. Mr. Burnside is a citizen of the United Kingdom and of the United States.

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Name/Age
  Title   Present Principal Occupation and Five-Year Employment History

Edward M. Liddy, 69

 

Director

 

Mr. Liddy has been a partner in the private equity investment firm Clayton, Dubilier & Rice, LLC since January 2010, having also been a partner at such firm from April to September 2008. From September 2008 to August 2009, Mr. Liddy was the interim chairman and chief executive officer of American International Group, Inc. (AIG). He served at AIG at the request of the U.S. Department of the Treasury. From January 1999 to April 2008, Mr. Liddy served as chairman of the board of the Allstate Corporation. He served as chief executive officer of Allstate from January 1999 to December 2006, President from January 1995 to May 2005, and chief operating officer from August 1994 to January 1999. Mr. Liddy currently serves on the board of directors of Abbott Laboratories, 3M Company, and The Boeing Company. In addition, Mr. Liddy formerly served on the board of The Boeing Company from 2007 to 2008. As the chairman and chief executive officer of Allstate Corporation and American International Group, Inc., Mr. Liddy brings valuable insights from the perspective of the insurance industry into AbbVie's business. As a partner of Clayton, Dubilier & Rice, LLC, Mr. Liddy gained significant knowledge and understanding of finance and capital markets matters as well as global and domestic strategic advisory experience.

Edward J. Rapp, 57

 

Director

 

Mr. Rapp was appointed in late 2014 as the Caterpillar Inc. group president for resource industries. He previously served at Caterpillar as group president based in Singapore in 2013 and 2014 and as the chief financial officer from 2010 to 2013, and he was named a group president in 2007. Mr. Rapp is presently a board member for FM Global and Junior Achievement USA. He is currently a member of the University of Missouri College of Business Strategic Development Board and a board member of the U.S.-China Business Council. As a result of his tenure as group president and chief financial officer at Caterpillar Inc., Mr. Rapp has acquired management, operational, and financial expertise with extensive global experience and provides the board with an informed perspective on financial and operational matters faced by a complex international company.

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Name/Age
  Title   Present Principal Occupation and Five-Year Employment History

Roy S. Roberts, 75

 

Director

 

Mr. Roberts was the emergency financial manager for Detroit Public Schools from 2011 until his retirement in 2013. Previously, he served as managing director of Reliant Equity Investors from 2000 to 2011. Mr. Roberts retired from General Motors in April 2000. At the time of his retirement, he was group vice president for North American Vehicle Sales, Service and Marketing of General Motors Corporation, having been elected to that position in October 1998. Mr. Roberts has served as director on the following boards: Thermon Manufacturing Company 2007 to 2010, Enova Systems, Inc., 2008 to 2011, Burlington Northern Santa Fe, 1991 to 2010, and Abbott Laboratories, 1998 to 2011. As a former executive of a major international corporation, Mr. Roberts has a strong record of valuable business, leadership, operational, and management experience which he brings to the board.

Glenn F. Tilton, 66

 

Director

 

Mr. Tilton was chairman of the Midwest for JPMorgan Chase & Co. from 2011 until his retirement in 2014. From October 2010 to December 2012, Mr. Tilton also served as the non-executive chairman of the board of United Continental Holdings, Inc. From September 2002 to October 2010, he served as chairman, president and chief executive officer of UAL Corporation, and chairman and chief executive officer of United Air Lines, Inc., its wholly owned subsidiary. Prior to becoming the vice chairman of Chevron Texaco following the merger of Texaco Inc. and Chevron Corp., Mr. Tilton enjoyed a 30-year multi-disciplinary career with Texaco Inc., culminating in his election as chairman and chief executive officer. Mr. Tilton is also a director of Abbott Laboratories and Phillips 66. Mr. Tilton also served on the board of directors of Lincoln National Corporation from 2002 to 2007, of TXU Corporation from 2005 to 2007, of Corning Incorporated from 2010 to 2012, and of United Continental Holdings, Inc. from 2010 to 2012. As chairman of the Midwest for JPMorgan Chase & Co. and having previously served as non-executive chairman of the board of United Continental Holdings, Inc., and chairman, president, and chief executive officer of UAL Corporation and United Air Lines, vice chairman of Chevron Texaco and as interim chairman of Dynegy, Inc., Mr. Tilton acquired strong management experience overseeing complex multinational businesses operating in highly regulated industries, as well as expertise in finance and capital markets matters.

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Name/Age
  Title   Present Principal Occupation and Five-Year Employment History

Frederick H. Waddell, 61

 

Director

 

Mr. Waddell has served as the chief executive officer of Northern Trust Corporation and The Northern Trust Company ("Northern Trust") since January 2008 and as chairman of the board since November 2009. He served as president from February 2006 through September 2011, and as chief operating officer from February 2006 to January 2008. Mr. Waddell served as a board member of Northern Trust from February 2006 to November 2009 prior to becoming the chairman of the board. As chairman and chief executive officer of Northern Trust, Mr. Waddell possesses broad financial services experience with a strong record of leadership in a highly regulated industry.

     

Mr. Waddell is currently the Chairman and Chief Executive Officer of Northern Trust Corporation (together with its subsidiaries, "Northern Trust"). Northern Trust, in the ordinary course of its business, from time to time possesses voting and/or dispositive power over Pharmacyclics shares owned, held or controlled in client trusts and other fiduciary accounts for which Northern Trust serves as sole or co-fiduciary, including through certain mutual funds managed by Northern Trust. In its most recent publicly filed report on Form 13-F, dated as of December 31, 2014, Northern Trust reported sole or shared dispositive power over 358,970 Pharmacyclics shares, with sole or shared voting power over all but 22 of such shares. Further, Northern Trust has indicated that it possesses sole or shared voting power over certain additional shares in client accounts which are not required to be reported on Form 13-F, as Northern Trust does not possess dispositive power with respect to such shares.

Laura J. Schumacher, 51

 

Executive Vice President, Business Development, External Affairs and General Counsel

 

Ms. Schumacher is AbbVie's Executive Vice President, Business Development, External Affairs and General Counsel. She served as Abbott's Executive Vice President, General Counsel, and Corporate Secretary from 2007 to 2012, and as Senior Vice President, Corporate Secretary, and General Counsel from 2005 to 2007. Ms. Schumacher was also responsible for Abbott's licensing and acquisitions function and its Office of Ethics and Compliance. Ms. Schumacher joined Abbott in 1990. She currently serves as a director of General Dynamics Corporation.

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Name/Age
  Title   Present Principal Occupation and Five-Year Employment History

William J. Chase, 47

 

Executive Vice President, Chief Financial Officer

 

Mr. Chase is AbbVie's Executive Vice President, Chief Financial Officer. He served as Abbott's Vice President, Licensing and Acquisitions from 2010 to 2012, as Vice President, Treasurer from 2007 to 2010, and as Divisional Vice President, Controller of Abbott International from 2004 to 2007. Mr. Chase joined Abbott in 1989.

Carlos Alban, 52

 

Executive Vice President, Commercial Operations

 

Mr. Alban is AbbVie's Executive Vice President, Commercial Operations. He served as Abbott's Senior Vice President, Proprietary Pharmaceutical Products, Global Commercial Operations from 2011 to 2012, as Senior Vice President, International Pharmaceuticals from 2009 to 2011, as Vice President, Western Europe and Canada from 2007 to 2009, and as Vice President, European Operations from 2006 to 2007. Mr. Alban joined Abbott in 1986.

Michael E. Severino, M.D., 49

 

Executive Vice President, Research and Development, Chief Scientific Officer

 

Dr. Severino is AbbVie's Executive Vice President, Research and Development, Chief Scientific Officer. Dr. Severino served at Amgen Inc. as Senior Vice President, Global Development and Corporate Chief Medical Officer from 2012 to 2014, as Vice President, Global Development from 2010 to 2012 and as Vice President, Therapeutic Area Head, General Medicine and Inflammation Global Clinical Development from 2007 to 2012. He joined AbbVie in 2014.

Timothy J. Richmond, 48

 

Senior Vice President, Human Resources

 

Mr. Richmond is AbbVie's Senior Vice President, Human Resources. He served as Abbott's Divisional Vice President of Compensation & Benefits from 2008 to 2012, as Group Vice President of Talent and Rewards from 2007 to 2008, and as Divisional Vice President of Talent Acquisition from 2006 to 2007. Mr. Richmond joined Abbott in 2006.

Azita Saleki-Gerhardt, Ph.D., 51

 

Senior Vice President, Operations

 

Dr. Saleki-Gerhardt is AbbVie's Senior Vice President, Operations. She served as Abbott's Vice President, Pharmaceuticals Manufacturing and Supply from 2011 to 2012, and as Divisional Vice President, Quality Assurance, Global Pharmaceutical Operations from 2008 to 2011. Dr. Saleki-Gerhardt joined Abbott in 1993.

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Name/Age
  Title   Present Principal Occupation and Five-Year Employment History

Thomas A. Hurwich, 54

 

Vice President, Controller

 

Mr. Hurwich is AbbVie's Vice President, Controller. He served as Abbott's Vice President, Internal Audit from 2009 to 2012, and as Divisional Vice President, Controller, Abbott Diagnostics Division from 2003 to 2009. Mr. Hurwich joined Abbott in 1983.

Directors and Executive Officers of the Offeror

Name/Age
  Title   Present Principal Occupation and Five-Year Employment History

William J. Chase, 47

  President and Director   Mr. Chase is President and Director of the Offeror. He is also AbbVie's Executive Vice President, Chief Financial Officer. He served as Abbott's Vice President, Licensing and Acquisitions from 2010 to 2012, as Vice President, Treasurer from 2007 to 2010, and as Divisional Vice President, Controller of Abbott International from 2004 to 2007. Mr. Chase joined Abbott in 1989.

Scott T. Reents, 47

 

Vice President, Tax

 

Mr. Reents is Vice President, Tax of the Offeror and of AbbVie. He served as Abbott's Divisional Vice President and Associated General Tax Counsel from 2010 to 2012 and as Senior Director of International Taxes located in Europe from 2008 to 2010.

Amarendra Duvvur, 46

 

Vice President and Treasurer

 

Mr. Duvvur is Vice President, Treasurer of the Offeror and of AbbVie. He served as Senior Vice President, Treasurer of CareFusion Corporation from 2009 to 2012. Mr. Duvvur joined Abbott in 2012 pending the separation of AbbVie.

Kathleen Sheil Scheidt, 42

 

Secretary

 

Ms. Scheidt is Secretary of the Offeror and Vice President, Securities & Benefits and Legal Operations of AbbVie Inc. She joined AbbVie in 2013 in connection with the company's separation from Abbott. Ms. Scheidt was Senior Counsel, Securities & Benefits at Abbott from October 2010 through 2012. She was a partner in a Chicago-based law firm for several years before joining Abbott.

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PART II—INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.    Indemnification of Directors and Officers.

        Delaware law provides that directors of a corporation will not be personally liable to the corporation or its stockholders for monetary damages for breach of their fiduciary duties as directors, except for liability:

        The limitation of liability does not apply to liabilities arising under the federal or state securities laws and does not affect the availability of equitable remedies, such as injunctive relief or rescission.

        AbbVie's amended and restated certificate of incorporation and by-laws include provisions that indemnify, to the fullest extent allowable under the DGCL, the personal liability of directors or officers for monetary damages for actions taken as a director or officer of AbbVie, or for serving at AbbVie's request as a director or officer or another position at another corporation or enterprise, as the case may be. AbbVie's amended and restated certificate of incorporation and by-laws also provide that AbbVie must indemnify and advance reasonable expenses to its directors and officers, subject to its receipt of an undertaking from the indemnified party as may be required under the DGCL. AbbVie's by-laws expressly authorize AbbVie to carry directors' and officers' insurance to protect AbbVie, its directors, officers and certain employees for some liabilities.

Item 21.    Exhibits and Financial Statement Schedules.

        A list of exhibits filed with this registration statement is contained in the index to exhibits, which is incorporated by reference.

Item 22.    Undertakings.

        (a)   The undersigned registrant hereby undertakes:

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        (b)   That, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange of 1934 (the "Exchange Act") (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (c)   (1) That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form.

        (d)   Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

        (e)   To respond to requests for information that are incorporated by reference into the prospectus/offer to exchange pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.

        (f)    To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.

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SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of North Chicago, State of Illinois, on April 17, 2015.

    ABBVIE INC.

 

 

By:

 

/s/ WILLIAM J. CHASE

        Name:   William J. Chase
        Title:   Executive Vice President, Chief Financial Officer

 

Signature
 
Title

 

 

 
/s/ RICHARD A. GONZALEZ

Richard A. Gonzalez
  Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

/s/ WILLIAM J. CHASE

William J. Chase

 

Executive Vice President, Chief Financial Officer (Principal Financial Officer)

/s/ THOMAS A. HURWICH

Thomas A. Hurwich

 

Vice President, Controller (Principal Accounting Officer)

*

Robert J. Alpern, M.D.

 

Director

*

Roxanne S. Austin

 

Director

*

William H.L. Burnside

 

Director

*

Edward M. Liddy

 

Director

*

Edward J. Rapp

 

Director

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Signature
 
Title

 

 

 
*

Roy S. Roberts
  Director

*

Glenn F. Tilton

 

Director

*

Frederick H. Waddell

 

Director

 

*   /s/ WILLIAM J. CHASE

William J. Chase
Attorney-in-Fact
   

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EXHIBIT INDEX

Exhibit
Number
  Description of Exhibit
  2.1 * Agreement and Plan of Reorganization, dated as of March 4, 2015, by and among AbbVie Inc., Oxford Amherst Corporation, Oxford Amherst LLC and Pharmacyclics, Inc., as amended by Amendment No. 1 to Agreement and Plan of Reorganization, dated as of March 22, 2015 (incorporated by reference to composite copy included as Annex A to Part I of this Registration Statement)

 

3.1

 

Amended and Restated Certificate of Incorporation of AbbVie Inc. (incorporated by reference to Exhibit 3.1 of AbbVie's Current Report on Form 8-K filed on January 2, 2013)

 

3.2

 

Amended and Restated By-Laws of AbbVie Inc. (incorporated by reference to Exhibit 3.2 of AbbVie's Current Report on Form 8-K filed on January 2, 2013)

 

4.1

 

Indenture dated as of November 8, 2012 between AbbVie Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of Amendment No. 5 to AbbVie's Registration Statement on Form 10 filed on November 16, 2012)

 

4.2

 

Supplemental Indenture No. 1 dated as of November 8, 2012 among AbbVie Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 of Amendment No. 5 to AbbVie's Registration Statement on Form 10 filed on November 16, 2012)

 

4.3

 

Support Agreement by and among AbbVie Inc., Oxford Amherst Corporation and Pharmacyclics, Inc. dated as of March 4, 2015 (incorporated by reference to Exhibit 4.1 of AbbVie's Current Report on Form 8-K filed on March 6, 2015)

 

5.1


Opinion of Wachtell, Lipton, Rosen & Katz regarding legality of securities being registered

 

8.1

*

Opinion of Wachtell, Lipton, Rosen & Katz as to tax matters.

 

8.2

*

Opinion of Wilson Sonsini Goodrich & Rosati P.C. as to tax matters

 

10.1

 

U.S. Transition Services Agreement dated as of December 31, 2012 by and between Abbott Laboratories and AbbVie Inc. (incorporated by reference to Exhibit 10.1 of AbbVie's Current Report on Form 8-K filed on January 2, 2013)

 

10.2

 

Ex-U.S. Transition Services Agreement dated as of December 31, 2012 by and between Abbott Laboratories and AbbVie Inc. (incorporated by reference to Exhibit 10.2 of AbbVie's Current Report on Form 8-K filed on January 2, 2013)

 

10.3

 

Tax Sharing Agreement entered into as of December 31, 2012 by and between Abbott Laboratories and AbbVie Inc. (incorporated by reference to Exhibit 10.3 of AbbVie's Current Report on Form 8-K filed on January 2, 2013)

 

10.4

 

Special Products Master Agreement dated as of December 31, 2012 by and between Abbott Laboratories and AbbVie Inc. (incorporated by reference to Exhibit 10.4 of AbbVie's Current Report on Form 8-K filed on January 2, 2013)

 

10.5

 

Employee Matters Agreement dated as of December 31, 2012 by and between Abbott Laboratories and AbbVie Inc. (incorporated by reference to Exhibit 10.5 of AbbVie's Current Report on Form 8-K filed on January 2, 2013)

 

10.6

 

Information Technology Agreement dated as of December 31, 2012 by and between Abbott Laboratories and AbbVie Inc. (incorporated by reference to Exhibit 10.8 of AbbVie's Current Report on Form 8-K filed on January 2, 2013)

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Exhibit
Number
  Description of Exhibit
  10.7   Transitional Trademark License Agreement dated as of December 31, 2012 by and between Abbott Laboratories and AbbVie Inc. (incorporated by reference to Exhibit 10.9 of AbbVie's Current Report on Form 8-K filed on January 2, 2013).

 

10.8

 

Form of Finished Goods Supply Agreements by and between Abbott Laboratories and AbbVie Inc. (incorporated by reference to Exhibit 10.11 of Amendment No. 2 to AbbVie's Registration Statement on Form 10 filed on September 4, 2012)

 

10.9

 

Form of Contract Manufacturing Agreements by and between Abbott Laboratories and AbbVie Inc. (incorporated by reference to Exhibit 10.12 of Amendment No. 2 to AbbVie's Registration Statement on Form 10 filed on September 4, 2012)

 

10.10

 

Form of Agreement Regarding Change in Control by and between AbbVie Inc. and its named executive officers (incorporated by reference to Exhibit 10.13 of Amendment No. 5 to AbbVie's Registration Statement on Form 10 filed on November 16, 2012)

 

10.11

 

AbbVie 2013 Incentive Stock Program (incorporated by reference to Exhibit A to the AbbVie Inc. Definitive Proxy Statement on Schedule 14A dated March 15, 2013)

 

10.12

 

AbbVie 2013 Management Incentive Plan (incorporated by reference to Exhibit 10.14 of AbbVie's Annual Report on Form 10-K filed on March 15, 2013)

 

10.13

 

AbbVie 2013 Performance Incentive Plan (incorporated by reference to Exhibit 10.15 of AbbVie's Annual Report on Form 10-K filed on March 15, 2013)

 

10.14

 

AbbVie Deferred Compensation Plan (incorporated by reference to Exhibit 10.16 of AbbVie's Annual Report on Form 10-K filed on March 15, 2013)

 

10.15

 

AbbVie Non-Employee Directors' Fee Plan (incorporated by reference to Exhibit 10.17 of AbbVie's Annual Report on Form 10-K filed on March 15, 2013)

 

10.16

 

AbbVie Supplemental Pension Plan (incorporated by reference to Exhibit 10.18 of AbbVie's Annual Report on Form 10-K filed on March 15, 2013)

 

10.17

 

AbbVie Supplemental Savings Plan (incorporated by reference to Exhibit 10.19 of AbbVie's Annual Report on Form 10-K filed on March 15, 2013)

 

10.18

 

Purchase Agreement dated November 5, 2012 between AbbVie Inc., Abbott Laboratories, as guarantor, and Morgan Stanley & Co. LLC, Barclays Capital Inc., J.P. Morgan Securities LLC, and Merrill Lynch, Pierce, Fenner & AbbVie Incorporated (incorporated by reference to Exhibit 10.21 of Amendment No. 6 to AbbVie's Registration Statement on Form 10 filed on November 30, 2012)

 

10.19

 

Form of AbbVie Inc. Non-Employee Director Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 of AbbVie's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013)

 

10.20

 

Form of AbbVie Inc. Non-Employee Director Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.3 of AbbVie's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013)

 

10.21

 

Form of AbbVie Inc. Performance Restricted Stock Agreement (CEO/Chairman) (incorporated by reference to Exhibit 10.4 of AbbVie's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013)

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Exhibit
Number
  Description of Exhibit
  10.22   Form of AbbVie Inc. Performance Restricted Stock Agreement (Annual) (incorporated by reference to Exhibit 10.5 of AbbVie's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013)

 

10.23

 

Form of AbbVie Inc. Performance Restricted Stock Agreement (Interim) (incorporated by reference to Exhibit 10.6 of AbbVie's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013)

 

10.24

 

Form of AbbVie Inc. Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.7 of AbbVie's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013)

 

10.25

 

Form of AbbVie Inc. Non-Qualified Replacement Stock Option Agreement (incorporated by reference to Exhibit 10.8 of AbbVie's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013)

 

10.26

 

Revolving Credit Agreement, dated as of August 18, 2014, among AbbVie, New AbbVie, Foreign HoldCo, JPMorgan Chase Bank, N.A. and the lenders and other parties party thereto (incorporated by reference to Exhibit 10.2 of AbbVie's Current Report on Form 8-K filed on August 21, 2014)

 

10.27

 

Amendment No. 1 to Revolving Credit Agreement, dated as of March 16, 2015, by and among AbbVie Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 of AbbVie's Current Report on Form 8-K filed on March 20, 2015)

 

10.28

 

364-Day Bridge Term Loan Credit Agreement, dated as of March 27, 2015, among the Company, as borrower, the various financial institutions party thereto, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent (incorporated by reference to Exhibit 10.1 of AbbVie's Current Report on Form 8-K filed on March 30, 2015)

 

21.1

 

Subsidiaries of AbbVie (incorporated by reference to Exhibit 21.1 to AbbVie's Annual Report on Form 10-K for the year ended December 31, 2014)

 

23.1

*

Consent of Deloitte & Touche LLP

 

23.2

*

Consent of Ernst & Young LLP

 

23.3

*

Consent of PricewaterhouseCoopers LLP

 

23.4


Consent of Wachtell, Lipton, Rosen & Katz for legality opinion (included in the opinion filed as Exhibit 5.1 and incorporated herein by reference)

 

23.5

*

Consent of Wachtell, Lipton, Rosen & Katz for tax matters opinion (included in the opinion filed as Exhibit 8.1 and incorporated herein by reference)

 

23.6

*

Consent of Wilson Sonsini Goodrich & Rosati P.C. for tax matters opinion (included in the opinion filed as Exhibit 8.2 and incorporated herein by reference)

 

99.1

*

Consent of Centerview Partners LLC

 

99.2

*

Consent of J.P. Morgan Securities LLC

 

99.3


Form of Letter of Election and Transmittal

 

99.4


Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees

 

99.5


Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees

*
Filed herewith.

Previously filed

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